Q2 2024 Option Care Health Inc Earnings Call

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Okay.

Operator: Good day, and thank you for standing by. Welcome to the Option Care Health second quarter 2024 earnings conference call. At this time, all participants are in a listen only mode.

Operator: Good day, and thank you for standing by.

Operator: After the speaker's presentation, there will be a question and answer session. To ask a question during the session, you will need to press star 1 1 on your telephone. You will then hear an automated message advising that your hand is raised.

Speaker Change: Good day and thank you for standing by welcome to the option care Health second quarter 2024 earnings Conference call. At this time, all participants are in a listen only mode.

Operator: Welcome to the Option Care Health 2nd quarter, 2024 earnings conference call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question-and-answer session.

Speaker Change: After the speaker's presentation, there will be a question and answer session.

Operator: To ask a question during the session, you will need to press Star 11 on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, please press star 11 again.

Speaker Change: To ask a question during the session you will need to press star one on your telephone.

Speaker Change: You will then hear an automated message advising your hand is raised.

Speaker Change: To withdraw your question. Please press star one again.

Operator: Please be advised that today's conference is being recorded.

Speaker Change: Be advised that today's conference is being recorded.

Nicole Maggio: I would now like to hand the conference over to your first speaker today, Nicole Maggio, Senior Vice President of Finance. Please go ahead.

Operator: To withdraw your question, please press star 1 1 again. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your first speaker today, Nicole Maggio, Senior Vice President of Finance. Please go ahead.

Nicole Maggio: I would now like to hand, the conference over to your first speaker today, Nicole <unk> Senior Vice President.

Speaker Change: Please go ahead.

Nicole Maggio: Good morning. Please note that today's discussion will include certain forward-looking statements that reflect our current assumptions and expectations, including those related to our future financial performance and industry and market conditions. These forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially from our expectations.

Nicole Maggio: Good morning, please note that today's discussion will include certain forward-looking statements that reflect our current assumptions and expectations, including those related to our future financial performance and industry and market conditions. These forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially from our expectations. We encourage you to review the information in today's press release, as well as in our Form 10-K and latest Form 10-Q filed with the SEC regarding the specific risks and uncertainties. We do not undertake any duty to update any forward-looking statements except as required by law. During this call, we will use non-GAAP financial measures when talking about the company's performance and financial condition.

Nicole Maggio: Good morning. Please note that today's discussion will include certain forward looking statements that reflect our current assumptions and expectations.

Nicole Maggio: Putting those related to our future financial performance and industry and market conditions.

Speaker Change: These forward looking statements are subject to risks and uncertainties that could cause actual results to differ materially from our expectations. We encourage you to review the information in today's press release as well as in our Form 10-K and latest Form 10-Q filed with the SEC regarding the specific risks and uncertainties, we do not undertake any duty.

Nicole Maggio: We encourage you to review the information in today's press release, as well as in our Form 10-K and latest Form 10-Q, filed with the SEC regarding the specific risks and uncertainties.

Nicole Maggio: We do not undertake any duty to update any forward-looking statements, except as required by law.

Speaker Change: To update any forward looking statements, except as required by law.

Nicole Maggio: During this call, we will use non-GAAP financial measures when talking about the company's performance and financial condition. You can find additional information on these non-GAAP measures, and this morning's press release posted on the Investor Relations portion of our website.

Speaker Change: During this call we will use non-GAAP financial measures when talking about the company's performance and financial condition. You can find additional information on these non-GAAP measures in this morning's press release posted on the Investor Relations portion of our website with that I will turn the call over to John Rademacher, Chief Executive Officer.

Nicole Maggio: You can find additional information on these non-GAAP measures in this morning's press release posted on the Investor Relations portion of our website. With that, I will turn the call over to John Rademacher, Chief Executive Officer. Thanks, Nicole, and good morning, everyone.

John Rademacher: With that, I will turn the call over to John Rademaker, Chief Executive Officer. Thanks, Nicole, and good morning, everyone. The second quarter was another productive quarter for the Auction Care Health team, despite a number of challenging dynamics. On our last call, we were in the midst of one of the most disruptive cyber attacks on the healthcare ecosystem in history, and managing through a number of supply chain disruptions that we're putting pressure on our business. As we sit here today, I am pleased to report that the team has made significant progress in managing through and recovering from these challenges.

John C. Rademacher: Thanks, Nicole and good morning, everyone.

John C. Rademacher: The second quarter was another productive quarter for the Option Care Health team, despite a number of challenging dynamics. On our last call, we were in the midst of one of the most disruptive cyber attacks on the healthcare ecosystem in history and managing through a number of supply chain disruptions that were putting pressure on our business. As we sit here today, I am pleased to report that the team has made significant progress in managing through and recovering from these challenges.

John C. Rademacher: Second quarter was another productive quarter for the option care health team, despite a number of challenging dynamics.

On our last call we were in the midst of one of the most disruptive cyber attacks on the health care ecosystem and history and managing through a number of supply chain disruptions that were putting pressure on our business.

John C. Rademacher: As we sit here today I am pleased to report that the team has made significant progress in managing through and recovering from these challenges.

John Rademacher: Building upon the momentum exiting the first quarter, the top line continues to perform well as the team delivered year-over-year growth of 14.8%. Growth was balanced across the portfolio, and consistent with the first quarter, we saw especially robust growth from our newer limited distribution and rare orphan therapies within our chronic portfolio. Throughout the challenges in the first half, the Auction Care Health team's ability to collaborate with referral sources to onboard new and service existing patients was never disrupted. In the face of adversity, the team more than rose to the challenge and developed innovative work-arounds and modified processes.

John C. Rademacher: Building upon the momentum exiting the first quarter, the top line continued to perform well as the team delivered year-over-year growth of 14.8%. Additionally, growth was balanced across the portfolio. And consistent with the first quarter, we saw especially robust growth from our newer limited distribution and rare orphan therapies within our chronic portfolio. Throughout the challenges in the first half, the Option Care Health team's ability to collaborate with referral sources to onboard new and service existing patients was never disrupted.

John C. Rademacher: Building upon the momentum exiting the first quarter. The top line continues to perform well as the team delivered year over year growth.

John C. Rademacher: Up 14, 8%.

John C. Rademacher: Growth was balanced across the portfolio and consistent with the first quarter, we saw especially robust growth from our newer limited distribution and rare orphan therapies within our chronic portfolio.

Speaker Change: Throughout the challenges in the first half theatrical care health teams ability to collaborate with referral sources to onboard new and service existing patients with never disruptive.

John C. Rademacher: In the face of adversity, the team more than rose to the challenge and developed innovative workarounds and modified processes. Mike will provide more granular perspective on the financials as always. But the revenue mix, as well as the lingering supply chain and remediation efforts related to the Change Healthcare incident did impact gross profit in the second quarter. However, we did generate approximately $10 million of incremental gross margin in the second quarter relative to the first quarter and continue to fight for every basis. And given our expense leverage and efficiency mindset, we dropped the $10 million to adjusted EBIT.

Speaker Change: In the face of adversity, the team more than rose to the challenge and develop innovative workarounds and modified processes.

John Rademacher: Mike will provide more granular perspective on the financials, as always, but the revenue mix, as well as the lingering supply chain and remediation efforts related to Change Healthcare incidents, did impact growth profit in the second quarter. However, we did generate approximately $10 million of incremental growth margin in the second quarter relative to the first quarter and continue to fight for every base. at this point. And given our expense leverage and efficiency mindset, we dropped the $10 million to the adjusted deeper online.

Speaker Change: Mike will provide more granular perspective on the financials as always.

Mike: But the revenue mix as well as the lingering supply chain and remediation efforts related to the change healthcare incident did impact gross profit in the second quarter.

Mike: However, we did generate approximately $10 million of incremental gross margin in the second quarter relative to the first quarter and continue to fight for every basis point.

Mike: And given our expense leverage and efficiency mindset, we dropped the $10 million could be adjusted EBITDA line.

John Rademacher: On our first quarter call, we identified two significant challenges that were affecting the enterprise, including disruptions in sourcing key therapeutic inputs and the operational impact of the Change Healthcare cyberattack. I'm pleased to report that, consistent with our previous comments, we resolved the sourcing challenges later in the second quarter with an alternative procurement strategy. Regarding the Change Healthcare situation, we have effectively reestablished connectivity with their key applications or established relationships with alternative service providers for various critical applications and tools we utilize across our operations in support of patient administration and revenue cycle management. With these primary tools largely back online earlier in the second quarter, we have made strong progress in our recovery offers.

John C. Rademacher: On our first quarter call, we identified two significant challenges that were affecting the enterprise, including disruptions in sourcing key therapeutic inputs and the operational impact of the change health care cyber. I'm pleased to report that, consistent with our previous comments, we resolved the sourcing challenges later in the second quarter with alternative procurement strategies. Regarding the changing healthcare situation, we have effectively re-established connectivity with their key applications or established relationships with alternative service providers for various critical applications and tools we utilize across our operations in support of patient administration and revenue cycle management.

Mike: On our first quarter call. We identified two significant challenges that were affecting the enterprise, including disruptions in sourcing key therapeutic inputs and the operational impact of the change healthcare cyber attack.

Mike: I am pleased to report that consistent with our previous comments, we resolved the sourcing challenges later in the second quarter with alternative procurement strategy.

Mike: Regarding the change health care situation, we have effectively reestablished connectivity with their key applications or established relationships with alternative service providers for various critical applications and tools, we utilized across our operations in support of patient administration and revenue cycle management.

Mike: Management.

John C. Rademacher: With these primary tools largely back online earlier in the second quarter, we have made strong progress in our recovery. Some of the advanced functionality around the revenue cycle continues to be remediated, and operationally, we have substantially recovered. Having said that, we still have some receivables to be posted, and patient pay collections have been delayed.

Mike: With these primary tools largely back online earlier in the second quarter, we have made strong progress in our recovery efforts.

John Rademacher: Some of the advance functionality around the revenue cycle continues to be remediated, and operationally we have substantially recovered. Having said that, we still have some receivables to be posted, and patient pay collections have been delayed. This continues to be an area of focus, and we expect there to be some modest inefficiencies in the third quarter as we complete our recovery. But as you'll see from our cash flow statement, we have made tremendous progress in reducing our accounts receivable and monetizing revenue in the quarter. As Mike will expand upon, given the progress around cash flow generation and the building strength of the balance sheet, we re-engaged on capital deployment efforts and re-purchased approximately $78 million of stock in the quarter.

Mike: Some of the advanced functionality around the revenue cycle continues to be Remediated and operationally we have substantially recovered.

Speaker Change: Having said that we still have some receivables to be posted in patient pay collections have been delayed.

John C. Rademacher: This continues to be an area of focus, and we expect there to be some modest inefficiencies in the third quarter as we complete our recovery. But as you'll see from our cash flow statement... We have made tremendous progress in reducing our accounts receivable and monetizing revenue during the quarter. As Mike will expand upon, given the progress around cash flow generation and the building strength of the balance sheet, we reengaged in capital deployment efforts and repurchased approximately $78 million of stock in the quarter.

Speaker Change: This continues to be an area of focus and we expect there to be some modest inefficiencies in the third quarter as we complete our recovery.

Speaker Change: But as Youll see from our cash flow statement, we have made tremendous progress in reducing our accounts receivable and monetizing revenue in the quarter.

Speaker Change: As Mike will expand upon given the progress around cash flow generation and the building strength of the balance sheet, we re engaged on capital deployment efforts and repurchased approximately $78 million of stock in the quarter.

John Rademacher: Our ability to respond quickly and adaptably to dynamics such as the Change Healthcare cyber attack or the procurement challenges is a direct result of our internal efforts to maintain robust enterprise risk management process, which regularly tests our ability to identify, assess and mitigate key risks to the organization and develop well-coordinated multi-functional responses. The emergence of these risks in the first half, as well as our strong response, reaffirms the critical need to continue to manage effectively and invest in our information technology and risk management functions.

John C. Rademacher: Our ability to respond quickly and adeptly to dynamics such as the change health care cyber attack or the procurement challenges is a direct result of our internal efforts to maintain a robust enterprise risk management process, which regularly tests our ability to identify, assess, and mitigate key risks to the organization and develop well-coordinated multifunctional responses. The emergence of these risks in the first half, as well as our strong response, reaffirms the critical need to continue to manage effectively During the second quarter, we maintained our active effort to engage with the investment community through a myriad of investor conferences and other ventures. Feedback and interaction with our shareholder base are invaluable. And I believe it better enables us to manage the enterprise.

Mike: Our ability to respond quickly and are definitely to dynamics such as the change healthcare cyber attack or the procurement challenges is a direct result of our internal efforts to maintain robust enterprise risk management process, which regularly test our ability to identify assess and mitigate key risks to.

Mike: The organization and develop well coordinated multi functional responses.

Mike: The emergence of these risks in the first half as well as our strong response reaffirms the critical need to continue to manage effectively and invest in our information technology and risk management functions.

John Rademacher: During the second quarter, we maintained our active effort to engage with the investment community through a myriad of investor conferences and other venues. Feedback and interaction with our shareholder base is invaluable, and I believe better enables us to manage the enterprise. One of the key areas of interest has been around our growth profile in the face of therapeutic advancements. I thought I would take a few minutes to reiterate how we view the growth profile of this enterprise. I believe we operate in an attractive area of the broader healthcare ecosystem, given that we provide clinically advanced high-quality care at an appropriate cost in a setting where patients want to receive. Our revenue base is comprised of dozens of therapeutic categories and hundreds of drugs, some growing north of 20% and some in decline.

Mike: During the second quarter, we maintained our active effort to engage with the investment community through a myriad of investor conferences and other venues.

Mike: Feedback and interaction with our shareholder base is invaluable and I believe better enables us to manage the enterprise.

John C. Rademacher: One of the key areas of interest has been around our growth profile in the face of therapeutic advances. I thought I would take a few minutes to reiterate how we view the growth profile of this enterprise. I believe we operate in an attractive area of the broader healthcare ecosystem, given that we provide clinically advanced, high-quality care at an appropriate cost in a setting where patients want to receive it. Our revenue base is comprised of dozens of therapeutic categories and hundreds of drugs, some growing north of 20% and some in decline.

Mike: One of the key areas of interest has been around our growth profile in the face of therapeutic advancements.

Mike: I thought I would take a few minutes to reiterate how we view the growth profile of this enterprise.

Mike: I believe we operate in an attractive area of the broader healthcare ecosystem.

Mike: Given that we provide clinically advanced high quality care at an appropriate cost in a setting where patients want to receive their care.

Mike: Our revenue base is comprised of dozens of therapeutic categories and hundreds of drugs, some growing north of 20% and some in decline.

John Rademacher: We believe our diversified therapeutic base, which ranges from mature, slower growing therapies such as intravenous antibiotics to rapidly growing new rare therapies such as Baijuba, is one of our key strengths. The BRAT enables us to better collaborate with referral sources and payers across a much broader spectrum of patients, and also helps mitigate our exposure to declines in individual therapies or categories. From the merger with Bioscript in 2019 through the first quarter of this year, we have delivered on average more than 11% top-line growth. This is despite several significant headwinds and shifts in prescribing patterns. For example, over that time horizon, a number of biosimilars were launched for Remake, and we saw reference prices for that therapy drop more than 80%.

John C. Rademacher: We believe our diversified therapeutic base, which ranges from mature, slower-growing therapies such as intravenous antibiotics to rapidly growing new, rare therapies such as Vyjubic, is one of our key strengths. The BRAC enables us to better collaborate with referral sources and payers across a much broader spectrum of patients and also helps mitigate our exposure to declines in individual therapies or categories. From the merger with Bioscript in 2019, through the first quarter of this year, we have delivered, on average, more than 11% top-line growth.

Mike: We believe our diversified therapeutic base, which ranges from mature slower growing therapies, such as intravenous antibiotics.

Mike: To rapidly growing new rare therapy, such as Baidu BEC is one of our key strengths.

Mike: The breath enables us to better collaborate with referral sources and payers across a much broader spectrum of patients and also helps mitigate our exposure to declines in individual therapies or categories.

Mike: From the merger with bio scrip in 2019 through the first quarter of this year, we have delivered on average more than 11% topline growth.

John C. Rademacher: This is despite several significant headwinds and shifts in prescribing. For example, over that time horizon, a number of biosimilars were launched for Remicade, and we saw reference prices for that therapy drop more than 80%. Cubicin, which was one of the last branded antibiotics and a significant drug within our antibiotic portfolio, went generic as daptomycin, and reference prices declined more than 90%.

Mike: This is despite several significant headwinds and shifts in prescribing patterns.

Mike: For example over that time horizon, a number of Biosimilars, where launch for Remicade and we saw reference prices for that therapy dropped more than 80%.

John Rademacher: Cubicin, which was one of the last branded antibiotics and a significant drug within our antibiotic portfolio, went generic as deptomycin, and reference prices declined more than 90%. As we shared last year, Ratacaba, which was a novel infused therapy for LLS, went oral, and our revenue base for that therapy declined rapidly beginning in late 2022. Yet, despite all of these and other therapeutic developments, we demonstrated the strength of our platform and continued to deliver attractive top-line growth. Our team never rests in their efforts to refine our therapeutic portfolio, and we constantly monitor and prepare for new product introductions or additional forms of administration.

Mike: <unk>, which was one of the last branded antibiotics and a significant drug within our antibiotic portfolio when generic is daptomycin and reference prices declined more than 90%.

John C. Rademacher: As we shared last year, RADICAVA, which was a novel infused therapy for ALS, went oral, and our revenue base for that therapy declined rapidly, beginning in late 2022. Yet despite all of these and other therapeutic developments, we've demonstrated the strength of our platform and continue to deliver attractive top-line growth. Our team never rests in its efforts to refine our therapeutic portfolio, and we constantly monitor and prepare for new product introductions or additional forms of administration. We all know that these treatments will see new biosimilar entrants. Subcutaneous formulations of infused therapies will be introduced, and existing products may receive a broader indication.

Mike: As we shared last year, Radicova, which was a novel infused therapy for LLS, when oral and our revenue base for that therapy declined rapidly beginning in late 2022.

Mike: Yet despite all of these and other therapeutic developments, we've demonstrated the strength of our platform and continue to deliver attractive top line growth.

Mike: Our team never rest and their efforts to refine our therapeutic portfolio and we constantly monitor and prepare for new product introductions or additional forms of administration.

John Rademacher: We all know that therapies will see new biosimilar entrants, subcutaneous formulations of infused therapies will be introduced, and existing products may receive broader indications. As these developments are identified, they are incorporated into our perspective regarding our top-line trajectory over the medium term. As we look at the drug pipeline, we see opportunities as well as risks, and we remain steadfast in our conviction regarding the growth opportunities for this enterprise. We believe we have a unique platform that provides extraordinary value to farm manufacturers, payers, prescribers, and patients, and we will continue to capitalize on the strength of our position to drive growth, capture market demand, and serve more patients.

Mike: We all know that therapies will see new biosimilar entrants subcutaneous formulations of infused therapies will be introduced in.

Mike: In existing products may receive broader indications.

John C. Rademacher: As these developments are identified, they're incorporated into our perspective regarding our top line trajectory over the medium term. As we look at the drug pipeline, we see opportunities as well as risks, and we remain steadfast in our conviction regarding the growth opportunities for this enterprise. We believe we have a unique platform that provides extraordinary value to pharma manufacturers, payers, prescribers, and patients, and we will continue to capitalize on the strength of our position to drive growth, capture market demand, and serve more patients.

Mike: As these developments are identified they are incorporated into our perspective regarding our top line trajectory over the medium term.

Mike: As we look at the drug pipeline, we see opportunities as well as risks and we remain steadfast in our conviction regarding the growth opportunities for this enterprise.

Mike: We believe we have a unique platform that provides extraordinary value to pharma manufacturers payers prescribers and patients and we will continue to capitalize on the strength of our position to drive growth capture market demand and serve more patients.

John Rademacher: As we look forward, we see a number of therapeutic dynamics on the horizon, and unfortunately, there is no standard script or certainty for how they will impact our enterprise positively or negatively. Every therapeutic introduction, every biosimilar or generic evolution, every label change is unique. And many of the variables, including pharma pricing and rebating strategies, pharma channel prioritization, and tater provider adoption strategies, are frankly out of our control. But, as we have demonstrated in the past, we have a resilient team and a strong platform to respond to these market dynamics, and we will do our best to respond to the developments as they unfold.

John C. Rademacher: As we look forward, we see a number of therapeutic dynamics on the horizon, and unfortunately, there is no standard script or certainty for how they will impact our enterprise, positively or negatively. Every therapeutic introduction, every biosimilar or generic evolution, every label change is unique, and many of the variables, including pharma pricing and rebating strategies, pharma channel prioritization, and payer provider adoption strategies are frankly out of our control.

Mike: As we look forward, we see a number of therapeutic dynamics on the horizon and Unfortunately, there is no standard script or certainty for how they will impact our enterprise positively or negatively.

Mike: Every therapeutic introduction every biosimilar or generic evolution every label change is unique.

Mike: And many of the variables, including pharma pricing and Rebating strategies pharmacy channel prioritization and payer and provider adoption strategies are frankly out of our control.

John C. Rademacher: But, as we have demonstrated in the past, we have a resilient team and a strong platform to respond to these market dynamics, and we will do our best to respond to the developments as they unfold. So as we sit here today, midway through 2024, I could not be prouder of the Option Care Health team and the level of patient care we've provided despite challenges in the first half. The enterprise is well positioned headed into the second half of the year, and based on the revised guidance provided this morning, we expect to deliver on our commitments for another strong year of growth. With that, I'll hand the call over to Mike. Thanks, John. Good morning, everyone.

Mike: But as we have demonstrated in the past we have a resilient team and a strong platform to respond to these market dynamics and we will do our best to respond to the developments as they unfold.

John Rademacher: So as we sit here today midway through 2024, I could not be prouder of the Option Care Hlth team and the level of patient care we've provided despite challenges in the first path. The enterprise's well-positioned headed into the second half of the year, and based on revised guidance provided this morning, we expect to deliver on our commitments for another strong year of growth.

Mike: So as we sit here today midway through 2024, I could not be prouder of the option care health team and the level of patient care, we provided despite challenges in the first half.

Mike: The enterprise is well positioned heading into the second half of the year and based on the revised guidance provided this morning, we expect to deliver on our commitments for another strong year of growth with that ill hand, the call over to Mike Mike.

John Rademacher: With that, I'll hand the call over to Mike. Thanks, John.

Michael Petusky: Good morning, everyone. Revenue growth in the second quarter of 14.8% versus prior year Q2 accelerated off the first quarter momentum. We drove solid growth in our more mature therapies across the acute and chronic portfolios and continue to see considerable contribution from new limited distribution and rare in orphan therapies that we've launched over the last year or two.

Mike: Thanks, John Good morning, everyone.

Mike: Revenue growth in the second quarter of 14.8% versus prior year Q2 accelerated off the first quarter momentum. We drove solid growth in our more mature therapies across the acute and chronic portfolios and continue to see considerable contribution from new limited distribution and rare and orphan therapies that we've launched over the last year or two. Gross profit of just under $250 million grew approximately 3% when normalizing for the $8-10 million of transitory procurement benefits included in the prior year's second quarter results.

Mike: Revenue growth in the second quarter of 2014, 8% versus prior year Q2 accelerated off the first quarter momentum.

Mike: We drove solid growth in our more mature therapies across the acute and chronic portfolios and continue to see considerable contribution from new limited distribution and rare and orphan therapies that we've launched over the last year or two.

Michael Petusky: Growth profit of just under $250 million grew approximately 3% when normalizing for the $8 to $10 million of transitory procurement benefits included in the prior year second quarter result. As discussed on the first quarter call, and as we expected, growth profit in the second quarter continued to be impacted by supply chain challenges for certain drugs and inputs, as well as the change healthcare situation, which affected our pharmacy operations and led to considerable inefficiencies in the quarter. Consistent with the expectations articulated on the first quarter call, we believe we have effectively resolved the supply chain challenges late in the second quarter, and as John mentioned in his comments, we've made significant progress in recovering from the Change Healthcare situation.

Mike: Gross profit of just under $250 million grew approximately 3% when normalizing for the $8 million to $10 million of transitory procurement benefits included in the prior year second quarter results.

Mike: As discussed on the first quarter call and as we expected, gross profit in the second quarter continued to be impacted by supply chain challenges for certain drugs and inputs, as well as the changed health care situation, which affected our pharmacy operations and led to considerable inefficiencies in the quarter. Consistent with the expectations articulated on the first quarter call, we believe we have effectively resolved the supply chain challenges late in the second quarter, and, as John mentioned in his comments, we have made significant progress in recovering from the changed health care situation.

Mike: As discussed on our first quarter call and as we expected gross profit in the second quarter continued to be impacted by supply chain challenges for certain drugs and inputs as well as the change health care situation, which affected our pharmacy operations and lead to considerable inefficiencies in the quarter.

Mike: Consistent with the expectations articulated during the first quarter call. We believe we have effectively resolve the supply chain challenges late in the second quarter and as John mentioned in his comments, we have made significant progress in recovering from the change healthcare situations.

Mike: SG&A flattened the quarter as we continue to drive efficiencies through investments in technology and operations. SG&A as a percent of revenue dropped to 12.5%, our lowest ratio on record, adjusted even to have $108.4 million, was up $10 million sequentially over the first quarter, and represented 8.8% of revenue.

Michael Petusky: S-GNA was flattened in the quarter as we continued to drive efficiencies through investments in technology and operational excellence. S-GNA as a percent of revenue dropped to 12.5%, our lowest ratio on record. Adjusted even to $108.4 million was of $10 million sequentially over the first quarter and represented 8.8% of revenue.

John C. Rademacher: SG&A was flat in the quarter as we continued to drive efficiencies through investments in technology and operational excellence.

John C. Rademacher: SG&A as a percent of revenue dropped to 12, 5% our lowest ratio on record.

Speaker Change: Adjusted EBITDA of $108 $4 million was up $10 million sequentially over the first quarter and represented eight 8% of revenue.

Michael Petusky: Learning for shares is another great story in the quarter. We earned 30 cents per share in the second quarter, which benefited from our share repurchase efforts that I'll touch upon in a minute. Cash flow rebounded in the quarter, and we are quite pleased with the recovery efforts. We generated almost $196 million in cash flow from operations in the quarter and reduced outstanding accounts receivable by more than $100 million, which spiked at the end of the first quarter due to the change healthcare situation. As we sit here today, our cash flow position has effectively recovered from the situation, and working capital is back in line with where we would expect it to be in the ordinary course.

Mike: Earnings per share is another great story in the quarter. We earned $0.30 per share in the second quarter, which benefited from our share repurchase effort that I'll touch upon in a minute. Cash flow rebounded in the quarter, and we are quite pleased with the recovery efforts.

John C. Rademacher: Earnings per share is another great story in the quarter.

John C. Rademacher: We earned <unk> 30 per share in the second quarter, which benefited from our share repurchase efforts that I'll touch upon in a minute.

Mike: Cash flow of about rebounded in the quarter and we are quite pleased with the recovery efforts, we generated almost $196 million in cash flow from operations in the quarter and reduced outstanding accounts receivable by more than $100 million.

Mike: We generated almost $196 million in cash flow from operations in the quarter and reduced outstanding accounts receivable by more than $100 million, which spiked at the end of the first quarter due to the changed health care situation. As we sit here today, our cash flow position has effectively recovered from the situation, and working capital is back in line with where we would expect it to be in the ordinary course. And at the end of the second quarter, we are comfortably back under two times net debt leverage.

Mike: Which spiked at the end of the first quarter due to the change healthcare situations.

Mike: As we sit here today, our cash flow position has effectively recovered from the situation and working capital is back in line with where we would expect it to be in the ordinary course and.

Michael Petusky: And at the end of the second quarter, we are comfortably back under two times net debt lever.

Mike: And at the end of the second quarter, we are comfortably back under two times net debt levered.

Michael Petusky: As we articulated on the first quarter call and reaffirmed at various investor events and engagements over the past few months, as our cash flows recovered from the Change Healthcare situation, we would re-engage on strategic capital deployment F. to that end, we remain focused on M&A efforts and continue to assess acquisition opportunities. We have also reengaged on share of purchase activities and repurchased approximately $78 million of stock in the second quarter. Our efforts ramped up as our cash flows improved in the quarter, and year to date we have repurchased more than $118 million of stock. And given the momentum and cash flow generation, we intend to remain focused on deploying capital through M&A and share of purchase strategies.

Mike: As we articulated on the first quarter call and reaffirmed at various investor events and engagements over the past few months, as our cash flows recovered from the change healthcare situation, we would re-engage on strategic capital deployment efforts. To that end, we remain focused on M&A efforts and continue to assess acquisition opportunities. We have also reengaged on share repurchase activities and repurchased approximately $78 million of stock in the second quarter.

Mike: As we articulated on the first quarter call and reaffirmed at various investor events and engagements over the past few months as our cash flows recovered from the change healthcare situation, we would reengage on strategic capital deployment efforts.

Mike: To that end, we remain focused on M&A efforts and continue to assess acquisition opportunities.

Mike: We are also re engaged on share repurchase activities and repurchased approximately $78 million of stock in the second quarter.

Mike: Our efforts ramped up as our cash flow improved in the quarter, and year-to-date, we have repurchased more than $118 million of stock. And given the momentum and cash flow generation, we intend to remain focused on deploying capital through M&A and share repurchase strategies. Finally, based on the first half results and our revised expectations, we are increasing our revenue expectations for the year to $4.75 billion to $4.85 billion. We have raised the bottom end of our adjusted EBITDA expectations and now expect to generate $435 million to $450 million for the year. And we continue to expect to generate more than $300 million in cash flow from operations. And with that, we'll open the call to questions. Operator.

Mike: Our efforts ramped up as our cash flows improved in the quarter and year to date, we have repurchased more than $118 million of stock.

Mike: And given the momentum in cash flow generation, we intend to remain focused on deploying capital through M&A and share repurchase strategies.

Michael Petusky: Finally, based on the first half results in our revised expectations, we are increasing our revenue expectations for the year to $4.75 billion to $4.85 billion. We have raised the bottom end of our adjusted EBITDA expectations and now expect to generate $435 million to $450 million for the year. And we continue to expect to generate more than $300 million in cash flow from operations.

Mike: Finally based on the first half results and our revised expectations, we are increasing our revenue expectations for the year to $4 75 billion to $4 85 billion.

Mike: We have raised the bottom end of our adjusted EBITDA expectations, and now expect to generate 435 million to $450 million for the year and.

Mike: And we continue to expect to generate more than $300 million in cash flow from operations.

Operator: And with that, we'll open the call for our questions.

Speaker Change: And with that we'll open the call for questions operator.

Operator: Operator?

Operator: Thank you. At this time, we will conduct the question-and-answer session. As a reminder, to ask your question, you will need to press Star 1-1 on your telephone and wait for your name to be announced.

Operator: Thank you. At this time, we will conduct the question and answer session. As a reminder, to ask your question, you will need to press star one on your telephone and wait for your name to be announced. To withdraw your question, please press star one again.

Speaker Change: Thank you at this time, we will conduct a question and answer session. As a reminder to ask your question you will need to press star one on your telephone and wait for your name to be announced to withdraw your question. Please press star one again.

Operator: To withdraw your question, please press Star 1-1 again. Please stand by, while we'll compile the Q&A roster.

Operator: Please stand by while we compile the Q&A roster. Our first question comes from the line of Lisa Gill of J.P. Morgan. Your line is now open.

Speaker Change: Please standby, while we compile the Q&A roster.

Mike: Okay.

Lisa Gill: Our first question comes from the line of Lisa Gill of JP Morgan. Your line is now open. Good morning, and thanks for all the detail.

Lisa Christine Gill: Good morning, and thanks for all the detail. First, Mike, can I start with just the mix in the quarter? Can you talk about what was chronic versus acute?

Speaker Change: Our first question comes from the line of Lisa Gill of Jpmorgan. Your line is now open.

Mike: And then secondly, I just want to better understand, you know, John's comments as we think about the shifting therapeutic environment and think about biosimilars. As we think about generics traditionally being a much better margin for alternative care, what do I think about biosimilars? And why would they not have a similar impact when we think about margin? Yeah, Lisa. I'll start with some of the mechanics and hand it over to John if he wants to address your second question.

Lisa Christine Gill: Good morning, and thanks for all the detail.

Lisa Gill: First, can I start with just the mix in the quarter? Can you talk about what was chronic versus acute?

Lisa Christine Gill: First Mike can I start with just the next in the quarter can you talk about what with chronic first is acute.

Lisa Gill: And then secondly, I just want to better understand, you know, John's comments as we think about the shifting therapeutic environment and think about biosimilars. As we think about generic traditionally being a much better margin for option care, how do I think about biosimilars? And why would they not have a similar impact when we think about margins?

Lisa Christine Gill: And then secondly, I just want to better understand.

Speaker Change: John Carman Disney can we think about that mix shifting.

Speaker Change: Shifting therapeutic environment and think about Biosimilars as we think about generics traditionally being a much better margin for option care.

Speaker Change: How do we think about Biosimilars and why would they not have a similar impact when we think about margins.

Michael Petusky: Yeah, Lisa, I'll start with some of the mechanics and hand it over for John if you want to address your second question. Mixing the second quarter was right around three quarters of our revenue was comprised of the chronic portfolio. So roughly right around 75-25, which makes sense because, as we talked about, you know, that cohort of therapies continues to outpace growth on the acute side.

Speaker Change: Yes, so I'll start with some of the mechanics and hand, it over for John If you want to.

John C. Rademacher: Mixing the second quarter was right around three quarters of our revenue was comprised of the chronic portfolio, so roughly right around 75-25, which makes sense because, as we talked about, that cohort of therapies continues to outpace growth on the acute side. Yeah, and Lisa, to my comments, it's a little bit hard to predict exactly how things are going to move.

Speaker Change: Your second question mix in the second quarter was right around three quarters of our revenue was comprised of the chronic portfolio. So.

John C. Rademacher: Roughly right around $75 25, which makes sense because as we've talked about that that cohort of therapies continues to outpace growth on the acute side.

John Rademacher: Yeah, and Lisa, you know, to my comments, a little bit hard to, you know, predict exactly how things are going to move. A lot of it depends on how many biosimilars enter into the marketplace. As we called out in the prepared remarks, as we saw with Remicade, it took time for that to kind of move forward as more products entered into the marketplace on the biosimilar. We normally see, as we talked about, you know, publicly, the biosimilar events normally are more of a revenue event than a margin dollar event on that. We do everything we can to make certain that we're better positioned when there's competition in the marketplace to look at cost of goods and be able to negotiate with manufacturers a better acquisition cost for those products.

Lisa: And Lisa.

Lisa Christine Gill: My comments.

Lisa Christine Gill: A little bit hard to.

Lisa Christine Gill: Predict exactly how things are going to move a lot of it depends on how many biosimilars enter into the marketplace as we called out in the prepared remark as we saw with Remicade. It took time for that to kind of move forward as more products entered into the marketplace on the Biosimilar, we normally see as we've talked about.

John C. Rademacher: A lot of it depends on how many biosimilars enter the marketplace. You know, as we called out in the prepared remarks, as we saw with Remicade, it took time for that to kind of move forward as more products entered the marketplace on the biosimilars. We normally see, as we've talked about publicly, the biosimilar events are normally more of a revenue event than a margin dollar event on that. We do everything we can to make certain that we're better positioned when there's competition in the marketplace to look at the cost of goods and be able to negotiate with manufacturers a better acquisition cost for those products.

Lisa Christine Gill: Publicly.

Lisa Christine Gill: <unk> biosimilar events normally are more of a revenue event that our margin.

John C. Rademacher: So, that's what we've been able to do with some of the biosimilars on a historical basis and looking for that opportunity to look at margin expansion as a percentage and trying to hold on to the dollars of the margin as we're negotiating better acquisition costs for the product. But, you know, there are a lot of variables in that, as you know, and that's why, you know, there is that level of uncertainty that I tried to call out within the prepared remarks.

John Rademacher: So that's, you know, what we've been able to do with some of the biosimilars on a historical basis and looking for that opportunity to look at margin expansion as a percentage and trying to hold onto the dollars of the margin as we're negotiating better acquisition cost for the product.

John Rademacher: But, you know, there's a lot of variables in that, as you know, and that's why, you know, there is that level of uncertainty that tried to call out within the, within the prepare to money.

Lisa Gill: And then, John, just as a follow-up to your preparing market, you talked about uses of cash, you talked about, you know, the stock that you bought back year to date, but you also mentioned, you know, the M&A environment.

John C. Rademacher: And then John, just as a follow-up to your prepared remark, you talked about uses of cash, you talked about, you know, the stock that you bought back year to date, but you also mentioned, you know, the M&A environment. Can you maybe just touch on that a little bit as to how you're thinking about share repurchase versus M&A? And, you know, what are you seeing in the market right now from a target perspective?

John Rademacher: Can you maybe just touch on that a little bit as to how you're thinking about Sherry purchase versus M&A and, you know, what are you seeing in the market right now from a target perspective? Yeah, look, Lisa, maybe I'll jump in on the cap law location. As we talked about, we're thrilled that starting in early 2023, we added a different arrow in the quiver, so to speak, in terms of our ability to deploy capital for shareholder value creation. Well, again, as we said, you know, we're going to continue to focus on M&A activities. I think there are a number of assets that we find intriguing that we think represent both strategic and economic value.

Lisa Christine Gill: From a target perspective.

John C. Rademacher: Yeah, well, Lisa, maybe I'll jump in on the capital allocation. Look, as we talked about, we're thrilled that, starting in early 23, we added a different arrow in the quiver, so to speak, in terms of our ability to deploy capital for shareholder value creation. Look, and as we've said, we're going to continue to focus on M&A activities. I think there are a number of assets that we find intriguing that we think represent both strategic and economic value.

Speaker Change: Yeah, maybe I'll jump in on the capital allocation as we've talked about we're thrilled that starting in early 'twenty three we added.

Speaker Change: A different era.

Lisa Christine Gill: Arrow in the quiver so to speak in terms of our ability to deploy capital for for for shareholder value creation.

Lisa Christine Gill: As we've said we're going to continue to focus on M&A activities. I think there are a number of.

Lisa Christine Gill: Of assets that we find intriguing that we think represent both strategic and economic value as we like to say this is a small neighborhood. We know everybody that lives on the street and we're not we're not waiting for a process. We're very proactive in in having those corporate development discussions given the strength of the balance.

John C. Rademacher: As we like to say, this is a small neighborhood. We know everybody that lives on the street, and we're not waiting for a process. We're very proactive in having those corporate development discussions. Given the strength of the balance sheet, now that we're well under two times levered and continuing to improve our leverage profile, look, we've got a very supportive balance sheet, and we think that we can continue to pursue both activities.

John Rademacher: As we like to say, this is a small neighborhood. We know everybody that lives on the street, and we're not, we're not waiting, you know, for a process; we're very proactive in having those corporate development discussions, given the strength of the balance sheet. Now that we're well under two times levered in continuing to improve our, our leverage profile. Look, we've, we've, we've got a very supportive balance sheet, and we think that we can continue to pursue both activities. So I think the expectation should be that while we'll obviously continue to look forward and try to anticipate capital needs for M&A investments.

Lisa Christine Gill: Sheet now that were well under two times, levered and continuing to improve our leverage profile.

Lisa Christine Gill: Look we've we've got a very supportive balance sheet and we think that we can continue to pursue both activity. So I think the expectation should be that while we'll obviously continue to look forward and try to anticipate capital needs for M&A investments I think that.

John C. Rademacher: I think the expectation should be that, while we'll obviously continue to look forward and try to anticipate capital needs for M&A investments, I think that you should expect to see us also continuing to deploy capital through share repurchase as well.

John Rademacher: I think that, you know, you should expect to see us also continuing to deploy capital through Sherry purchase as well.

Lisa Christine Gill: You should expect to see US also continuing to.

Lisa Christine Gill: Deploy capital through share repurchase as well.

Lisa Gill: Great.

Konstantin Davydovich: Well, congratulations on the quarter and thanks for the question. Yeah, thanks, Lisa. Thank you. Our next question will come from the line of Konstantin Davydovich of Citizens JMP. Your line is now open. Thanks. Good morning.

John Rademacher: Well, congrats on the quarter, and thanks for the question. Yeah. Thanks, Lisa.

Speaker Change: Okay, great well congrats on the quarter and thanks for the question.

Lisa Christine Gill: Yes, Thanks Lisa.

Operator: Thank you.

John C. Rademacher: Just wondering on the change front, can you maybe just expand a little bit on where you guys are in efforts to neutralize the impact there, some of the steps from a technology standpoint you're taking to implement these processes, and if it's possible, Mike, can you just put a box around maybe what kind of drag that's been on cost of revenue or SG&A or maybe in terms of consolidated margins? Thanks. Yeah, Constantine. Thanks for the questions, John.

Constantine Davides: Our next question will come from the line of cost and team interviews of citizens, JMP. Your line is now open. Thanks. Good morning.

Speaker Change: Thank you. Our next question will come from the line of costs in <unk>.

Speaker Change: Citizens JMP your line is now open.

Constantine Davides: Just wondering on the change front. Can you maybe just expand a little bit on where you guys are on efforts to neutralize the impact there? Some of the steps from a technology standpoint, you're taking control of the process.

Costs: Thanks. Good morning, just wondering on the change Brian can you, maybe just expand a little bit on where you guys are on efforts to neutralize the impact there.

Brian: The steps from a technology standpoint.

Speaker Change: You are taking tangible net process.

Constantine Davides: And if it's possible, Mike, can you just put a box around maybe what kind of drag that's been on cost revenue or SNA or maybe in terms of consolidated margins? Thanks. Yeah, Constantine.

Mike: As possible Mike can you just put up a box around maybe what kind of drag that's been.

Mike: Cost of revenue, our SG&A or maybe in terms of.

Speaker Change: Consolidated margins thanks.

John C. Rademacher: I'll start with kind of the broader picture, and then certainly turn it over to Mike to try and box that in. But I just need to really call out the great work our team did in the quarter, not only to reestablish our ability to submit those claims but, more importantly, to collect the cash on that. A lot of work was done behind the scenes, not only to validate and certify that the system was ready to go back online, but also, as called out in the prepared remarks, move forward with alternative solutions where necessary in order to augment that patient registration through the revenue cycle management process. We still have some work to do.

John Rademacher: Thanks for the question. It's gone.

Speaker Change: Yes, Konstantin thanks for the question John.

John Rademacher: I'll start with kind of a broader picture, and then certainly turn it to Mike to try to box that. So I just need to really call out the great work our team did in the quarter, not only to reestablish our ability to submit those claims and, more importantly, to collect the cash on that. A lot of work was done behind the scenes, not only to validate and to certify the system was ready to go back online, but also, as it's called out in the prepared remarks, move forward with alternative solutions where necessary in order to augment that patient registration through revenue cycle management process.

Speaker Change: I'll start with kind of a broader.

Speaker Change: A broader picture and then certainly turn it to Mike to trying to box that so I just need to.

Speaker Change: Really call out the great work our team did in the quarter not only to reestablish our ability to.

Speaker Change: To submit those claims and more importantly to collect the cash on that.

Speaker Change: A lot of work was done behind the scenes not only to validate and to certify.

Speaker Change: The system was ready to go back online, but also called out in the prepared remarks move forward with alternative solutions, where necessary in order to augment that patient registration through revenue cycle management process.

John Rademacher: We still have some work to do, as we had called out really in the first quarter earnings call. We talked about, by the end of the year, we would be done. We're probably ahead of that by every measure that we have. But there are going to be some, you know, some lingering effects into the third quarter as we're focusing around posting cash and some aspects that we have to do on the back end, as well as now, we'll turn a lot of focus towards patient pay collections. As you would expect, that's going to lag because we have to submit the claims to the payers first and get that adjudicated to really understand what was the amount of deductible that was owed by the patient.

John C. Rademacher: As we had called out really loud in the first quarter earnings call, we talked about by the end of the year, we would be done. We're probably ahead of that by every measure that we have, but there are going to be some lingering effects into the third quarter as we focus around posting cash and some aspects that we have to do on the back end, as well as now turning a lot of focus toward patient pay collections.

Speaker Change: We still have some work to do as we had called out really in the first quarter earnings call. We talked about by the ended the year, we would be done we're probably ahead of that.

Speaker Change: By every every measure that we have but there are going to be some.

Speaker Change: Some lingering effects into the third quarter as we're focusing around posting cash in some aspects that we have to do on the backend as well as now I will turn a lot of focus towards patient pay collections. As you would expect that's going to lag because we had to submit the claim to the payers first and get that adjudicated to really understand what was it.

John C. Rademacher: As you would expect, that's going to lag because we had to submit the claims to the payers first and get that adjudicated to really understand what the amount of the deductible that was owed by the patient. So as that kind of moves forward, we'll feel some of that linger into the third quarter, but it is well behind us in terms of the bolus of activity that we have and really tremendous progress in the quarter and continued momentum as we're in the third quarter now. Hey Constantine, it's Mike.

Speaker Change: The amount of deductible that was owed by the by the patient. So is that kind of moves forward, we'll feel some of that linger into the third quarter, but it is well behind us.

John Rademacher: So is that kind of move forward? We'll feel some of that linger into the third quarter, but it is well behind us. The bolus of activity that we have and really tremendous progress in the quarter and continued momentum as we're in the third quarter.

Speaker Change: Bolus of activity that we have and and really tremendous progress in the quarter and continued momentum as we're as we're in the third quarter now.

Michael Petusky: Hey, Constantine, it's Mike.

Mike: Yeah, in terms of the impact, look, we haven't put a specific number on the impact, largely because, despite some of those challenges, we're actually in a position to increase our expectations for the year. And so we typically will call out these types of items with a specific dollar amount if it's causing us to deviate out of our guidance range. But having said that, look, the larger impact was on our SG&A and on our indirect spend, as we've talked about. Our ability to onboard and have a highly efficient revenue cycle and patient registration efforts was hampered considerably in the quarter, with a lot of the automated tools that we utilize to onboard patients quickly, as well as to process and drop claims efficiently, were offline.

Michael Petusky: Yeah, in terms of the impact, look, we haven't put a specific number on the impact largely because, you know, despite some of those challenges, we're actually in a position to increase our expectations for the year. And so we typically will call out these types of items with a specific dilemma. If it's causing us to deviate out of our guidance range, but having said that, look, the larger impact was on our SG&A and on our indirect spend. As we've talked about, you know, our ability to onboard and have a highly efficient revenue cycle and patient registration efforts was hampered considerably in the quarter, with a lot of the automated tools that we utilize to onboard patients quickly, as well as to process and drop claims efficiently, were offline.

Mike: There was an impact on our cost of service, which is in gross margin as well, primarily attributed to the fact that, look, going into, you know, onboarding patients, we have a disciplined process to make sure we're responsive to referral sources. But that runway to onboard verified benefits and get compounded therapies out the door was considerably shorter. So there were some pharmacy and operational inefficiencies that, again, as John reiterated, but we think we're pretty much out of the work on that.

Michael Petusky: There was an impact within our cost of service, which is in gross margin as well, primarily attributed to the fact that what going into, you know, onboarding patients, we have a discipline process to make sure we're responsive to referral sources. That runway to onboard verified benefits and get compounded therapies out the door was considerably shorter.

Michael Petusky: So there were some, some pharmacy and operational inefficiencies that, again, as John reiterated, we think we're pretty much out of the work on that. So we would expect a, a cleaner expense base going into the third quarter.

Mike: And so we would expect a cleaner expense base going into the third quarter. And just one quick follow-up question. Any sort of benefit, maybe longer term or intermediate term, around your ability to take share just by standing with referral sources as other competitors might have stumbled through that?

John Rademacher: And just one quick follow-up, any sort of benefit, maybe longer term or intermediate term around your ability to take share, just standing with referral sources as other competitors might have stumbled through that. Yeah, come from Tina, both, you know, through these types of events, as well as just our overall focus of being a partner of choice for referral sources, continues to strengthen when we're able to respond to these types of events. So, you know, we always focus around region frequency of our commercial team of developing those relationships and trying to be that reliable source.

Speaker Change: Courses as other competitors might have stumbled through that.

John C. Rademacher: Yeah, Constantine, both, you know, through these type of events, as well as just our overall focus of being a partner of choice for referral sources, continues to strengthen when we're able to respond to these types of events. So, you know, we always focus around reaching the frequency of our commercial team of developing those relationships and trying to be that reliable source. And, you know, I will call out that this is a hustle business. I mean, we've got to earn those referrals and bring those patients on board every single day. But our teams are really well positioned.

Speaker Change: Yes conference.

Speaker Change: Both.

Speaker Change: Through these types of events as well as just our overall focus of being a partner of choice for our referral sources.

Speaker Change: <unk> continues to strengthen when we are able to respond to these type of events. So.

Speaker Change: We always focus around reach and frequency of our commercial team of developing those relationships and trying to be that reliable source.

John Rademacher: And, you know, I will call out that this is a hustle business. I mean, we've got to earn those referrals and bring those patients on board every single day, but our teams are really well positioned. And I think the consistency of our service model, as well as the consistency of our message in being able to take patients on through any of that disruption. I think created goodwill with our referral base.

Speaker Change: I will call up if this is a hustle business I mean, we've got to earn those referrals and and bringing those patients on board every single day, but our teams are really well positioned.

John C. Rademacher: And I think the consistency of our service model, as well as the consistency of our message, and being able to take patients on through any of that disruption, I think, has created goodwill with our referral base. Thank you. Thanks, Tom.

Speaker Change: And I think the consistency of our service model as well as the consistency of our message and being able to take patients on through any of that disruption I think created goodwill with our referral base.

Constantine Davides: Thank you. Thanks.

Speaker Change: Thank you.

Operator: Thank you.

Constantine: Thanks Constantine.

Operator: Thank you. All right, thank you. Our next question comes from the line of Matt Larew of William Blair. Your line is now open. Good morning.

Speaker Change: Alright. Thank you. Our next question comes from the line of Matt Larew William Blair. Your line is now open.

Matthew Larew: Our next question comes from the line of Matt Leroux, a William Blair. Your line is not open.

Matthew Larew: Hi, good morning. Thanks for taking a question.

Matthew Richard Larew: Thanks for taking the question. We're going to stick on the cost side quickly. So despite the disruptions you identified and had to deal with in the quarter, SG&A was down sequentially and basically flat year-over-year despite 15% revenue growth. You know, just moving into the back half of the year, I guess as we just think about gross profit growth relative to the 10% revenue growth implied in guidance and, you know, any sort of benefits you're getting from recent cost actions or other incoming costs to think about. And maybe just help us think more about the cost side of the equation, given John's comments on more of the top line. Yeah, Matt.

Matthew Richard Larew: Hi, Good morning, Thanks for taking question maybe on the cost side quickly so despite the disruption.

Matthew Larew: Can you move to stick on the cost side quickly?

Michael Petusky: So, despite the disruptions you, you identified and had a deal in the quarter, SNA was down sequentially and basically flat year over year despite, you know, 15% revenue growth. You're just moving into the back half of the year. I guess as we just think about gross profit growth relative to the 10% revenue growth and plighting guidance. And, you know, any sort of you know, benefits you're getting from recent cost actions or other incoming costs to think about, it may be to help us think about more of the cost side of the equation, given John's comments on more of the top of the equation.

Speaker Change: <unk> identified another deal in the quarter.

Speaker Change: SG&A was down sequentially and basically flat year over year, despite a 15% revenue growth.

Speaker Change: Just moving into the back half of the year.

Speaker Change: As we just think about gross profit growth relative to the 10% revenue growth implied in guidance.

Speaker Change: Any sort of.

Speaker Change: Benefits, you're getting from recent cost actions or are other incoming costs to think about.

Speaker Change: And maybe just help us think about it more on the cost side of the equation given John's comments.

Speaker Change: The top line side of equation.

Michael Petusky: Yeah, Matt, I think, look, obviously, you know, one of the things we preach is the scalability and the leverage ability of this platform, and, you know, the culture is we're always looking for coins in the self of cushions. Having said that, we continue to invest in growth initiatives and invest in our commercial capabilities every single quarter. The great thing is behind the scenes, we have a very disciplined process to prioritize and ensure that not only are we investing for the growth of this platform, but also harvesting efficiencies as we deploy automation, technology, and other means.

Mike: I think, look, obviously, one of the things we preach is the scalability and the leverageability of this platform. And, you know, the culture is that we're always looking for coins in the sofa cushion. Having said that, we continue to invest in growth initiatives and invest in our commercial capabilities every single quarter. The great thing is, behind the scenes, we have a very disciplined process to prioritize and ensure that not only are we investing in the growth of this platform but also harvesting efficiencies as we deploy automation, technology, and other means.

Speaker Change: Yes, Matt I think look obviously you know one of the things we preach is the scalability and the leverage ability of this platform and the culture is we're always looking for coins in the sofa cushion, having said that we continue to invest in growth initiatives and invest in our commercial capabilities.

Speaker Change: <unk> every single quarter. The great thing is behind the scenes, we have a very disciplined process to prioritize and ensure that not only are reinvesting for the growth of this platform, but also harvesting efficiencies as we deployed automation technology.

Mike: I think going into the back half of the year, I think the second quarter is very illustrative of John's comments around, look, we generated $10 million of incremental gross margin. We were able to drop that almost dollar for dollar to the bottom line. And that's why, like I said, behind the curtains, you know, we're continuing to invest. We have a high degree of confidence that that thesis will continue.

Michael Petusky: I think going into the back half of the year, I think the second quarter is very illustrative to John's comments around. Look, we generate $10 million of incremental growth margin. We were able to drop that almost dollar for dollar to the bottom line. And that's why, like I said, behind the curtains, you know, we're continuing to invest. We have a high degree of confidence that that thesis will continue. And so I think going into the back half, while we don't give individual line guidance. And I think the second quarter is a decent proxy for how we view our spending levels.

John C. Rademacher: And other means I think going into the back half of the year I think the second quarter is very illustrative to John's comments around and look we generate $10 million of incremental gross margin, we were able to drop that almost dollar for dollar to the bottom line.

Speaker Change: And that's why like I said behind the curtains.

Speaker Change: We're continuing to invest we have a high degree of confidence that that thesis will continue and so I think going into the back half while we don't give individual line guidance I think the second quarter as a decent proxy for how we view our spending levels as we grow the level again at 12, 5%.

Mike: And so I think going into the back half, while we don't give individual line guidance, I think the second quarter is a decent proxy for how we view our spending levels. I mean, as we grow the level, again, at 12.5%, you know, that's key to the algorithm of this enterprise is continuing to drive that spending leverage as a percent of revenue. Okay, thanks. And maybe I'll circle back to John.

Michael Petusky: I mean, as we grow the level again at 12 and a half percent, you know, that's key to the algorithm of this enterprise is continuing to drive that spending leverages a percent revenue. I think some, you know, maybe I'll circle back to John's comments on the growth profile. You know, there, I think, been a record number of biologists who proved your to date and that's going to continue in the back half of the year. I think some kind of reading feelings and payers, some maybe reengagement about care in the home or preference in the home.

Speaker Change: That's that's key to the algorithm of this enterprise is continuing to drive that that spending leverage as a percent of revenue.

Speaker Change: Okay. Thanks, and then maybe I'll circle back to John's Com.

Matthew Richard Larew: I think there have been a record number of biologics approved year-to-date, and that's going to continue in the back half of the year. I think some kind of reading tea leaves from payers, some maybe re-engagement about care in the home or preference in the home. If I add John's comments up, I mean...

John C. Rademacher: Comment on the growth profile there.

Speaker Change: A record number of biologic improved year to date and that's going to continue in the back half of the year I think some kind of reading tea leaves from payers.

Speaker Change: Reengagement about care in the home or preference to the home.

Michael Petusky: If I had John's comments up, I mean, typically you guy and more to the high single digits, but as you alluded to, you've delivered double digit growth in your time as a public company. I mean, you have a view that sort of market forces post COVID are making this a sustainably higher underlying market growth. Is the competitive, your competitive position shifted so that you should take more of that market.

Speaker Change: If I add John's comments.

John C. Rademacher: Typically, you guide more to the high single digits, but as you alluded to, you've delivered double-digit growth in your time as a public company. I mean, do you have a view that sort of the market forces post-COVID are making this a sustainably higher underlying market growth? Is your competitive position shifted so that you should take more of that market? I mean, what are we really to make of Jonathan's comments? Because I guess my take would be that we should be modeling higher. Yeah, Matt.

John C. Rademacher: Typically you guided more to the high single digits, but as you alluded team delivered double digit growth in your time as a public company.

John C. Rademacher: You have a view that similar market forces postponement are making this a sustainably higher underlying market growth.

Speaker Change: Is it competitive competitive.

John C. Rademacher: Competitive position shifted so that you should take more of that market I mean, what do we really to makeup jonathan's comments, because I guess my take would be that we should be modeling higher in the future.

Michael Petusky: I mean, what are we really to make of John's comments, because I guess my cake could be that we should be modeling higher in the future.

John Rademacher: Yeah, Matt. So a couple of things, you know, from the best insights that we have, you know, from industry, you know, studies, et cetera. We expect that home infusion is going to be growing in that mid single digit range as it's, as I said, you know, we've got dozens of therapeutic categories and we've got hundreds of drugs that are part of the overall portfolio. And they're not all moving in the same direction. We certainly try to look for every opportunity we have to capitalize on the position, the investments that we've made. And, you know, our focus around limited distribution and drugs and the ability to use our platform of not only clinical competencies, but the ability to reach consistently, you know, 96% of the U.S. population.

John C. Rademacher: So a couple things, you know, from the best insights that we have, you know, from industry, studies, etc. We expect that home infusion is going to be growing in that mid single-digit range. As I said, you know, we've got dozens of therapeutic categories, and we've got hundreds of drugs that are part of the overall portfolio, and they're not all moving in the same direction. We certainly try to look for every opportunity we have to capitalize on the position, the investments that we've made and our focus around limited distribution drugs and the ability to use our platform of not only clinical competencies but the ability to reach consistently 96% of the US population as We expect that there are going to be these puts and takes that are going to move forward. There are a lot of unknowns around practice patterns of prescribing physicians.

Matthew Richard Larew: Yes, Matt.

Speaker Change: So a couple of things.

Speaker Change: From the best insights that we have from industry studies.

Speaker Change: Studies et cetera, we expect that home infusion is going to be growing in that mid single digit range.

Speaker Change: As I said, we've got dozens of therapeutic categories and we've got hundreds of drugs that are part of the overall portfolio and theyre not all moving in the same direction. We certainly try to look for every opportunity we have to capitalize on the position and the investments that we've made.

Speaker Change: And our.

Speaker Change: Our focus around limited distribution drugs and the ability to use our platform.

Speaker Change: Not only clinical competencies, but the.

Speaker Change: Ability to reach consistently.

Speaker Change: 96% of the U S population as being a part of that.

John Rademacher: As being a part of that value proposition that we bring into the marketplace. We expect that, you know, there's going to be these puts and takes that are going to move forward. There are a lot of unknowns around, you know, practice patterns of the prescribing physicians. And, you know, we've heard loud and clear from some of our prescribing physicians that if a patient is responding well to the therapy they're on, they're not inclined to move them on to a new indication. So, you know, as this kind of moves and develops as it moves forward, we're going to try to take every advantage that we have; continue to build on the momentum of the organization.

Speaker Change: The value proposition that we bring into the marketplace.

Speaker Change: We expect that there's going to be these puts and takes that are going to move forward. There are a lot of unknowns around <unk>.

Speaker Change: Practice patterns of the prescribing physicians and we've heard loud and clear from some of our prescribing physicians that if a patient is responding well to the therapy, they're on they're not inclined to move them onto a new indication.

John C. Rademacher: And we've heard loud and clear from some of our prescribing physicians that if a patient is responding well to the therapy they're on, they're not inclined to move them on to a new indication. So, you know, as this kind of moves and develops as it moves forward, we're going to try to take every advantage that we have, and continue to build on the momentum of the organization. And, you know, our expectations of our commercial team are that we're outhustling the competition and that we're going to continue to be a partner of choice for referral sources, for payers, etc.

Speaker Change: No.

Speaker Change: As this kind of moves and develops as it moves forward, we're going to try to take every advantage that we have continue to build on the momentum of the organization and.

John Rademacher: And, you know, we are expectations of our commercial team is that we're out hustling the competition and that we're going to continue to be a partner of choice for referral sources, for payers, etc. So, all those things I think kind of fit into our expectations that we should be beating that the market on that given, you know, that focus around, you know, our ability to execute. But I would probably put it into that band that we've normally set, which is we expect the marketplace to be growing in that, you know, mid single digits. And we expect that we would be, you know, to be able to beat that in the high single digits is kind of where we would focus our energy.

John C. Rademacher: So all those things, I think, kind of fit into our expectations that we should be beating the market on that, given that focus around our ability to execute. But I would probably put it into that band that we've normally set, which is we expect the marketplace to be growing in the mid-single digits. And we expect that we would be, you know, to be able to beat that in the high single digits. That's kind of where we would focus our energy. All right, thank you. Thanks, Matt.

David MacDonald: Thank you. All right.

David MacDonald: Thank you.

David MacDonald: Our next question comes from the line of David MacDonald, the truest.

Operator: Thank you. Our next question comes from the line of David MacDonald of Truist. Your line is now open. Hey, good morning, guys.

David MacDonald: Your line is now open. Hey, good morning, guys. A couple of quick questions.

David Samuel MacDonald: A couple of quick questions. Mike, just want to make sure I got the timing right. I think you said that the supply chain drag wasn't resolved until the end of the quarter. Is that correct? So you guys absorbed that through the entire quarter? Is that correct on timing? Yeah, later innings.

Michael Petusky: Mike, just want to make sure I got the timing right. I think you said that the supply chain drag wasn't resolved until the end of the quarter. Is that correct? So you guys absorbed that through the entire quarter? Is that correct on time?

Michael Petusky: Yeah, later innings, there is absolutely an impact in the second quarter for the most part. Okay.

Mike: There is absolutely an impact in the second quarter, for the most part. Okay, and then, Mike, can you just help us a little bit with the top line and pull it apart just a little bit? When we think about the strength of the top line growth, you know, was the acute kind of growth, you know, that low single-digit growth that we expect, and then I guess the kind of installed chronic, maybe low double-digit, and then the LDD, you know, really what kind of pushed that higher if we kind of do the math backwards into that? Just any additional detail there? Yeah, I think you're within hand grenade range, Dave.

Michael Petusky: And then Mike, can you just help us a little bit with the top line and pull it apart just a little bit when we think about the strength of the top line growth. You know, was the acute kind of growing, you know, that low single digit that we expect. And then I guess the kind of installed chronic, maybe low, double digit, and then the LVD, you know, really what kind of pushed that higher if we kind of do the math backwards into that, I just, just any additional detail there. Yeah, I think you were then hand grenade range.

Mike: I think, look, you know, the more established therapies were more in line with the growth profiles that we've generally come to expect. I think, you know, and if you think back to our initial guidance range, we were really guiding folks to that high single-digit, low double-digit top line for the year. I think the delta between that range and where we're delivering today is generally due to some of those newer novelties, as John mentioned, you know, the LDDs and the rare and orphans where, frankly, going into the year, you know, we were still commercializing some of those.

Michael Petusky: Dave, I think, look, you know, the more established therapies were more in line with the growth profiles that we've generally come to expect. I think, you know, and if you think back to our initial guidance range, we were really guiding folks to that high single digit, low double digit top line for the year. I think the delta between that range and where we're delivering today is generally due to some of those newer novel, as John mentioned, you know, the LVDs and in the rare and orphans where frankly going into the year, you know, we were still, you know, commercializing some of those.

Speaker Change: In grenade range, Dave I think look.

Dave: The more.

Dave: The more established therapies were more in line with with the growth profiles that we've generally come to expect I think.

Speaker Change: And if you think back to our initial guidance range, we were really guiding folks to that high single digit low double digit top line for the year I think the delta between between that range and where we are delivering today is generally due to some of those newer novel as John mentioned, the ldds in the rare and orphan where.

Dave: Frankly going into the year, we were still commercializing some of those so we were more conservative with expectations that obviously has an impact on the margin rate as you've heard us preach time and time again, because upfront a lot of that what I'll call that that revenue over performance.

Michael Petusky: So we were more conservative with expectations that obviously has an impact on the margin rate, as you've heard us preach time and time again, because up front a lot of that what I'll call that revenue over performance comes at mid single digit gross margin rates, which again, the rate is depressed, but it's on a much higher revenue event.

Mike: So we were more conservative with expectations, and that obviously has an impact on the margin rate. As you've heard us preach time and time again, because up front, a lot of that, what I'll call that revenue over performance comes at mid single-digit gross margin rates, which again, the rate is depressed, but it's on a much higher revenue event. So the dollars are still attractive, but it does have that impact on the margin.

Dave: Comes it at mid single digit gross margin rates, which again the rate is depressed, but it's on a much higher revenue event and so the dollars are still attractive but it does have.

Michael Petusky: And so the dollars are still attractive, but it does have, it does have that impact on the margin rate.

Dave: It does have that impact on the margin rate.

Michael Petusky: And then I guess just last couple, you know, when we think about the patient characteristics of chronic and how much more quickly that's growing, is there any reason to not think about this business as a high single-digit SG&A business three to five years down the road. High single digit SGNA always a percent of revenue. Yeah, I mean, look at that. We're going to absolutely continue to drive that leverage. How fast, you know, it's going to be, you know, the toggle, you know, as a percent of revenue. The denominator, to some extent, is out of our control because there's AFPs of drugs.

Mike: And then, I guess, just the last couple, you know, when we think about patient characteristics of chronic and how much more quickly that's growing, is there any reason not to think about this business as a high single-digit SG&A business three to five years down the road?

Speaker Change: And then I guess just last couple when we think about.

Speaker Change: The patient characteristics of chronic and how much more quickly. That's growing is there any reason to not think about this business as a high single digit SG&A business three to five years down the road.

Mike: Oh, as a percent of revenue? Yeah, I mean, look, I think that we're absolutely going to continue to drive that leverage. How fast, you know, it's going to be, you know, the toggle, you know, as a percent of revenue, the denominator is, to some extent, out of our control because there are ASPs of drugs. But I would absolutely expect that, you know, SG&A leverage will continue to drift southward. Okay, and then guys, just the last one, just wanted to quickly ask about the infusion suite.

Speaker Change: High single digit SG&A as a percent of revenue, yes, I mean look I correct that works, we're going to absolutely continue to drive that leverage how fast it's going to be the toggle is it.

Speaker Change: Percent of revenue denominator to some extend it out of our control because theres asps of drugs.

Michael Petusky: But I would absolutely expect that, you know, SG&A leverage will continue to drift southward.

Speaker Change: But I would absolutely expect that SG&A leverage we will continue to to drift southward.

Michael Petusky: Okay, and then guys, just last one, just wanted to quickly ask on the infusion suites. You know, it feels like you guys are pretty close to steady state in terms of, you know, how many have got out there. I was just wondering what kind of nursing efficiency lift you are now seeing in some of your most mature or highest utilizing suites. Yeah, look, this continues to be a great lover for us to drive operational efficiency. You know, in the quarter, we're approaching 32% of all of our nursing events that are occurring in one of our suites, and again, we don't force patients into them.

Speaker Change: Okay, and then guys just last one just wanted to.

Speaker Change: Quickly ask on the infusion suites.

Mike: Um, you know, it feels like you guys are pretty close to steady state in terms of how many have got out there. I was just wondering what kind of nursing efficiency lifts you are now seeing in some of your most mature or highest utilizing suites.

Speaker Change: It feels like you guys are pretty close to steady state in terms of how many you've got out there I was just wondering what kind of nursing efficiency lift you are now seeing in some of your most mature or highest utilizing suites.

Mike: Yeah, look, this continues to be a great lever for us to drive operational efficiency. You know, in the quarter, we're approaching 32% of all of our nursing events are occurring in one of our suites. And again, we don't force patients into them. We make them aware of conveniently located suites.

Dave: Yes.

Dave: To be a great lever for us to drive operational efficiency.

Speaker Change: In the quarter were approaching 32% of all of our of our nursing events are occurring in one of our suites and again, we don't force patients into them, we make them aware of conveniently located suites and frankly, we found that the patient experience is quite favorable.

John Rademacher: We make them aware of conveniently located suites, and frankly, we found that the patient experience is quite favorable in those. As you remember, we really started our infusion suite expansion strategy, and now we're right about 700 shares, coast to coast. For those earlier front, we're seeing north at 20% nurse productivity, which, you know, the savings that we are able to drive from avoiding wind shield time and concurrent infusion efficiencies, more than pays for the rent, the utilities and drops about a 20% improvement in that, you know, clinical cost per nursing event. And so, you know, it obviously helps margins, but we think of it as it's creating almost 20% more nurse capacity, which is vital to fuel our continued growth.

Mike: And frankly, we found that the patient experience is quite favorable in those. As you remember, we really started our, our, infusion suite expansion strategy, and now we're right about 700 shares coast to coast for those earlier tranches. We're seeing north at 20% nurse productivity, which, you know, the savings that we are able to drive from avoiding windshield time and concurrent infusion efficiencies more than pays for the rent, the utilities and drops about a 20% improvement in that clinical cost per nursing event.

Speaker Change: Those as you remember, we really started our our infusion suite expansion strategy and now we're right about 700 chairs coast to coast for those earlier tranches were seeing north of 20% nurse productivity, which.

Speaker Change: The savings that we are able to drive from avoiding windshield time and concurrent.

Speaker Change: Infusion efficiencies more than pays for the rent utilities and drops about a 20% improvement in that.

Speaker Change: Clinical cost per for nursing event and so.

Mike: And so, you know, a, it obviously helps margins, but B, we think of it as it's creating almost 20% more nurse capacity, which is vital to fuel our continued growth. Okay, thanks very much, guys. I appreciate it.

Speaker Change: It obviously helps margins, but b, we think of it as it's creating almost 20% more nurse capacity, which is vital to fuel our continued growth.

Michael Petusky: Okay, thanks very much, guys. Appreciate it.

David Samuel MacDonald: Thanks, Dave. Thank you. Our next question comes from the line of Peto Chickering of Deutsche Bank. Your line is now open.

Speaker Change: Okay. Thanks, very much guys I appreciate it.

Michael Petusky: Thank you.

Dave: Thanks, Dave.

Pito Chickering: Our next question comes from the line of Pito Chickering of Deutsche Bank. Your line is now open.

Philip Chickering: Thank you. Our next question comes from the line of <unk> Chickering.

Philip Chickering: <unk> Deutsche Bank. Your line is now open.

Philip Chickering: Hey, uh, good morning, guys. Looking at the implied guidance, can you give us any color on how we should be modeling gross profit dollar growth in the back half of the year versus what we saw in the first half of the year? And if we're modeling for high single-digit growth, excluding procurement benefits, is there anything wrong with that? Hey, Kito, it's Mike.

Pito Chickering: Hey, good morning, guys. Looking at the implied guidance, can you give us any column house you modeling grows profit dollar growth in the back half year, versus it was on the first half year, and if we're modeling or high single digit growth, excluding the procurement benefits, is there any one with that?

Philip Chickering: Hey, good morning, guys.

Philip Chickering: The implied guidance can you give us any color on how you're modeling gross profit dollar growth in the back half of the year versus what we saw the first half a year and if were modeling is our highest single digit growth excluding any procurement benefits is there anything wrong with that.

Michael Petusky: Hey, Pito, it's my, obviously, we don't provide specific guidance on individual PNL lines, and you can go a little cross-eyed with kind of normalizing with some of the moving pieces relative to the base. Back to my comment a couple minutes ago, I think, you know, the second quarter proxy where you saw a generating $10 million of incremental growth margin over the first quarter, not saying the number in Q3 is a plus 10, but I think that's the kind of leverage and sequential improvement as we think about the back half that, frankly, isn't dissimilar to normalize previous years, and I think that's kind of how we're thinking.

Mike: Obviously, we don't provide specific guidance on individual P&L lines, and you can go a little cross-eyed with the kind of normalizing with some of the moving pieces relative to the base. Back to my comment a couple of minutes ago, I think, you know, the second quarter proxy where you saw generating $10 million of incremental gross margin over the first quarter, not saying the number in Q3 is a plus 10, but I think that's the kind of leverage and sequential improvement as we think about the back half that, frankly, isn't dissimilar to normalized previous years.

Philip Chickering: Hey, Peter It's Mike obviously, we don't provide specific guidance on an individual P&L lines and you can go a little cross-eyed with kind of normalizing with some of the moving pieces relative to the base.

Philip Chickering: Back to my comment a couple of minutes ago, I think the second quarter proxy, where you saw generating $10 million of incremental gross margin over the first quarter not saying the number in Q3 as a plus 10, but I think that's the kind of leverage in sequential improvement as we think about the back half that frankly isn't dissimilar to normalize.

Mike: And I think that's kind of how we're thinking. Look, for us to deliver on the second half of the year, which we have a high degree of confidence, obviously, that comes through incremental gross margin dollars. Again, the way we've talked, Kito, is that we're maximizing the gross margin dollar performance of the platform. What is growing versus the prior year, again, we've got a couple of tough comps coming up with the procurement benefits, which creates a little bit of a tougher comp. Right, but you know, if we're thinking about gross profit dollars or high school digits excluding procurement, that's maybe in the ballpark. There's nothing wrong with that, intellectually.

Philip Chickering: As previous years and I think that's that's kind of how we're thinking look for us to deliver on the second half of the year in which we have a high degree of confidence obviously that comes through incremental gross margin dollars again, the way we've talked vetoes.

Michael Petusky: Look, for us to deliver on the second half of the year, in which we have a high degree of confidence, obviously, that comes through incremental growth margin dollars. Again, the way we talked to Pito is, you know, we're maximizing the growth margin dollar performance of the platform.

Philip Chickering: Maximizing the gross margin dollar performance.

Pito Chickering: You know, what is growing versus the prior year? Again, we've got a couple of tough comps coming up with the procurement benefits, which creates a little bit of a tougher comp. Right, but you know, if we're thinking about growth profit dollars or high school digit excluding procurement, that's maybe in the ballpark. Is that wrong with that, intellectually? I think it's generally in the ballpark.

Speaker Change: <unk>.

Speaker Change: What it's growing versus the prior year again, we've got a couple of tough comps coming up with the procurement benefits, which which creates a little bit of a tougher comp.

Speaker Change: Right.

Speaker Change: Thank you for thinking about gross profit dollars were high single digit excluding procurement that's maybe in the ballpark there is nothing wrong with that intellectually.

Mike: I think it's generally in the ballpark. All right. Perfect. So, you know, free script, you know, like you talked a lot about, you know, obviously the impact of biosimilars, you know, and there's a lot of concern around the impact on 2025 coming from this. If you look at the class of all the drugs that you've had in the last couple of years, move from brands into biosimilars, is there any sort of color that they can give us on what the gross profit per script is and how this changes?

Speaker Change: I think it's generally in the ballpark alright, perfect. So free script deal that you've talked a lot about obviously the impact of Biosimilars.

Pito Chickering: All right, perfect.

Michael Petusky: So, you know, if we script Pito, look, you talked a lot about, you know, obviously, the impact of biosimilars. You know, and there's a lot of concern about the impact for 2025 come from this. If you look at the class of all the drugs that you've had in the last couple of years, move from brand into biosimilars, there's only sort of color that they can give us on what is the gross profit per script and how this changes. If I think about that, it's down 5-10 percent, you know, where we are today versus. Winners under Brands.

Speaker Change: And there is lots of Cerner the impact for 2025. Some from this if you look at the class of all the drugs that you have had the last couple of years move from brand into Biosimilars.

Speaker Change: Color.

Speaker Change: Can give us on what is the gross profit per script and how that's changed.

Mike: Like, you know, if I think about that sort of down, five, 10%, you know, where we are today versus where we were in the ballpark, is that in the park? The only thing I would say, Peto, and I'll hand it over to John, is that there is no script.

Speaker Change: If you think about that is we're down.

Speaker Change: <unk> hundred 10%.

Speaker Change: We are today versus.

Michael Petusky: Is that in the ballpark?

Speaker Change: One is on your brand is that in the ballpark.

Michael Petusky: I get the only answer, and I'll hand it over to John.

Speaker Change: Yeah.

Speaker Change: The thing I would say Peter.

Speaker Change: I'll hand, it over to Jon There is no script.

John Rademacher: There is no script. We've had quite a few generic in biosimilar events. A lot of it, as John mentioned in some of his comments, a lot of it around channel adoption, how the manufacturers are pricing and approaching the channel is completely out of our control. I know that folks are, and we try to provide some prepared remarks because this has been a constant question over the last couple of months. There just isn't any prescribed pathway where the AFP is going to come x percent after the third biosimilar, and margin dollars will be plus or minus x.

Mike: You know, we've had quite a few generic and biosimilar events. A lot of it, as John mentioned in some of his comments, a lot of it around channel adoption, how the manufacturers are pricing and approaching the channel, is completely out of our control. And so I know that folks are, you know, and we try to provide some prepared remarks because this has been a constant question over the last couple months.

John C. Rademacher: We've had quite a few generic and biosimilar events a lot of it as John mentioned in some of his comments a lot of it around channel adoption, how the how the manufacturers are pricing an approach in the channel is completely out of our control and so I know that folks are.

Speaker Change: And we tried to provide some prepared remarks, because this has been a constant question over the last couple of months.

Speaker Change: There just isn't any.

Mike: There just isn't any prescribed, you know, pathway where, you know, the ASP is going to compress X percent after the third biosimilar, and margin dollars will be plus or minus X dollars. It really depends, and it's pursuant to a number of variables that, frankly, are out of our control.

Speaker Change: Prescribed.

Speaker Change: Pathway, where the Asps is going to compress X percent after the third biosimilar and margin dollars will be plus or minus <unk>.

John Rademacher: It really depends, and it's pursuant to a number of variables that, frankly, are out of our control. The only other thing I'd add to you is what we do see is with the introduction, let's even move from the biosimilars, but when we see some introduction of new brand new products that are entering into the marketplace and some of the awareness campaigns that come with that, we see a list of some of the existing products that we have within the portfolio as well as those new products that are entering in. There's a lot of advertisement dollars and awareness campaigns that happen with that.

Speaker Change: It really depends and it's pursuant to a number of variables that frankly are out of our control yes. The only other thing I'd add Peter is.

John C. Rademacher: Yeah, the only other thing I'd add, Peto, is that when we see some introduction of new branded products that are entering the marketplace and some of the awareness campaigns that come with that, we see a lift in some of the existing products that we have within the portfolio, as well as those new products that are entering. So, you know, there's a lot of advertising dollars and awareness campaigns that go along with that.

Speaker Change: What we do see is with the introduction, let's let's even move from the Biosimilars, but when we see some introduction of new new branded products that are entering into the marketplace and some of the awareness campaigns that come with that we.

Speaker Change: We see.

Speaker Change: Lift of some of the existing products that we have within the portfolio as well as those new products that are entering in so there's a lot of.

Speaker Change: Advertisement dollars and awareness campaigns that happen with that and that kind of benefit.

John C. Rademacher: And that kind of benefits the existing products that are in the portfolio, as well as that opportunity to bring new products into our formulary and be able to dispense those as well. So, you know, some moving pieces there, and, you know, as we tried to at least put some contextual around, we've seen these before.

John Rademacher: That kind of benefits the existing products that are in the portfolio as well as that opportunity to bring the new products into our formulary and be able to dispense those as well. So, some moving pieces there, and as we tried to put some contextualize around, we've seen these before. They've all operated a little bit differently, but the organization has been able to respond very efficiently and effectively to either offset some of the revenue decline or make certain that we are trying to preserve every basis point of profit that we can through the way that we negotiate with the manufacturers.

Speaker Change: The existing products that are in the portfolio as well as that opportunity to bring the new product into our formulary and be able to dispense those as well so.

Speaker Change: So moving pieces, there and as we tried to at least put some.

Speaker Change: Contextualize around we've seen these before they've all operated a little bit differently, but the organization has been able to respond.

John C. Rademacher: They've all operated a little bit differently, but the organization has been able to respond very efficiently and effectively to either offset some of the revenue decline or make certain that we are trying to preserve every basis point of profit that we can through the way that we negotiate with the manufacturer. A quick sort of follow-up on that segue, you know, what are your thoughts around Lilly's new Alzheimer's drug and the impact that could potentially have on your sort of future pipeline? Thank you.

Speaker Change: Efficiently and effectively to either offset some of the revenue decline or make certain that we are trying to preserve every basis point of.

Speaker Change: <unk> profit that we can through the way that we negotiate with the manufacturers.

John Rademacher: It's a quick follow-up on the Segway, you know, what are thoughts on Lily's new Alzheimer's drug and the impact that could set you have on your search feature pipeline? Thank you. Yeah, and first and foremost, again, continue to be, you know, very thrilled that new products are entering for this therapeutic category. Anyone that has a loved one that is afflicted with Alzheimer's, you know, the fact that we're starting to have some products that are starting to address cognitive impairment again is pretty, pretty amazing.

Speaker Change: A quick sort of follow up on the on the segway.

Speaker Change: What are your thoughts around the lease new Alzheimers drug and the impact that could potentially have on your sort of future pipeline. Thank you.

Philip Chickering: Yeah, and first and foremost, again, we continue to be very thrilled that new products are entering this therapeutic category. Anyone that has a loved one that is afflicted with Alzheimer's, the fact that we're starting to have some products that are starting to address cognitive impairment again is pretty amazing. We're still, you know, very conservative in our view until we have better understanding around what the path to payment is and the medical policies that will be adhered to.

Speaker Change: Yeah, first and foremost again continue to be.

Speaker Change #102: Very thrilled that new products are entering for this therapeutic.

Speaker Change: Category anyone that has a loved one that has afflicted with all timers.

Speaker Change: We are starting to have some products that are starting to address.

Speaker Change: Ignorant of impairment again.

Speaker Change: It's pretty pretty amazing.

John Rademacher: We're still, you know, very conservative in our view until we have a better understanding around what's the path to payments and the medical policies that will be adhered to. As you know, a vast majority of this is for the elderly population that's really going to fall under the Medicare banner, both for fee-for-service or Medicare Advantage. We're in active conversations with the payers and the sponsors for the MA plans to try to understand how they're looking at bringing these products forward. And I think as we start to see, you know, the prescription patterns and the adoption of the product, we think we're well positioned with our infusion suites and with our capabilities to be a partner of choice for Lily.

Speaker Change: We're still.

Speaker Change: Very conservative in our view.

Speaker Change: So we have better.

Speaker Change: Understanding around what's the path to payment and the medical policies that will be adhere to as you know a vast majority of this is for the elderly population that is really going to fall under the Medicare.

Philip Chickering: As you know, a vast majority of this is for the elderly population that's really going to fall under the Medicare banner, both for fee-for-service and Medicare Advantage. We're in active conversations with payers and the sponsors of the MA plans to try to understand how they're looking at bringing these products forward. And I think as we start to see prescribing patterns and the adoption of the product, we think we're well positioned with our infusion suites and with our capabilities to be a partner of choice for Lilly or for Biogen or anyone that has an infused or HCP-supervised injectable associated with that.

Speaker Change: Banner, both for fee for service or Medicare advantage, we're in active conversations with the payers.

Speaker Change: Payers.

Speaker Change: The sponsors for the MA plans to try to understand how they're looking at bringing these products forward.

Speaker Change: And I think as we start to see.

Speaker Change: The prescription patterns and the adoption of the product.

Speaker Change: We think we're well positioned.

Speaker Change: Our infusion suites and with our capabilities to be a partner of choice for Lilly or for our biogen or anyone that has infused or HCP.

John Rademacher: Or for a Biogen or anyone that has a infused or a HCT overseen injectable associate with that. And so we're going to continue to have, you know, constructive conversations there. But it's really hard to tell at this point in time how that's going to have impact until we get better certainty around path to payment and medical policies.

Speaker Change: Overseen injectable associated with that and so we're going to continue to have.

Philip Chickering: And so we're going to continue to have, you know, constructive conversations there, but it's really hard to tell at this point in time how that's going to have an impact until we get better certainty around path to payment and medical policies. Great, thanks so much.

Speaker Change: Constructive conversations there, but it's really hard to tell at this point in time.

Speaker Change: That's going to have impact.

Speaker Change: Until we get better certainty around path to payment and medical policy.

Brian Tanquilut: Thank you. Our next question comes from the line of Brian Tanquilut of Jeffries. Your line is now open.

Speaker Change: Great. Thanks, so much.

John C. Rademacher: Thank you, Peter. Thank you. Our next question comes from the line of Brian Tanquilla of Jefferies. Your line is now open.

Peter: Thank you Peter.

Brian <unk>: Thank you. Our next question comes from the line of Brian <unk> of Jefferies. Your line is now open.

Brian Tanquilut: Hey, good morning, guys. Mike, maybe as I think about, you know, just all the moving pieces that you've talked about this morning. And as I look out to 2025, is it right to think that next year should be a normalized year without a lot of noise, as I think about, you know, relative to the medium growth targets that you've set out.

Brian Gil Tanquilut: Hey, good morning, guys. Mike, maybe as I think about, you know, just all the moving pieces that you've talked about this morning and as I look out to 2025, is it right to think that next year should be a normalized year without a lot of noise, as I think about, you know, relative to the medium growth targets that you've set out? Hey, Brian, it's Mike.

Brian: Hey, good morning, guys, Mike maybe as I think about just all the moving pieces that you've talked about this morning.

Brian: And as I look out to 2025.

Brian: Is it right to think that next year should be a normalized year with.

Speaker Change: Lot of noise.

Speaker Change: Think about relative to the medium growth targets that you've set out.

Michael Petusky: Hey, Brian, Mike, obviously I'm going to give you the answer that's going to be unfulfilling, but at this point we're just not in a position to provide any granularity or thoughts on 2025 or just starting to kick off our efforts around developing our 2025 expectations, which, you know, we'll share on our call in February. I understand.

Mike: Obviously, I'm going to give you an answer that's going to be unfulfilling. But at this point, we're just not in a position to provide any granularity or thoughts on 2025. We're just starting to kick off our efforts around developing our 2025 expectations, which, you know, we'll share on our call in February. And then maybe just on the biosimilar discussion, and maybe putting your PBM hat back on, as we think about, obviously, ASPs will come down when a biosimilar is introduced.

Mike: Hey, Brian It's Mike.

Speaker Change: Im going to give you the answer that is going to be unfulfilling, but at this point, we're just not in a position to provide any granularity or thoughts on 2025 are just starting to kick off our our efforts around developing our 2025.

Speaker Change: Expectations, which.

Speaker Change: We'll share on our call in February.

Mike: But from a payer perspective, is it right to think that, you know, they understand your economics and the value they bring to the table, and the gross profit dollar that you're making on a drug should not really change much? I mean, is that a good way to think about that dynamic? Hey, Brian.

Brian Tanquilut: And then maybe just unbiased similar discussion, maybe putting your PBM back, PBM hat back on as we think about, you know, obviously, ASPs will come down when advice and we're introduced, but from a perspective, is it right to think that, you know, they understand your economics and the value they bring to the table and the gross profit dollar that you're making on a drug should not really change much. I mean, is that a good way to think about that dynamic.

Speaker Change: I understand.

Speaker Change: And then maybe just on the Biosimilar discussion and maybe putting a <unk> hat back on as we think about obviously.

Speaker Change: Asps will come down when a biosimilar has introduced but from a payer perspective is it right to think that they understand the economics and the value they bring to the table in the gross profit dollar that you are making on the drug should not really changed much I mean is that a good way to think about that dynamic.

John Rademacher: Hey, Brian, it's done. I'll start, and then Mike get at color. We always are trying to reinforce the value that we bring to the payers in helping to reduce the total cost of care when they're looking at the alternative as to where care could be delivered. We are on the right side of the cost-quality equation in that. And so, you know, we think that there are some constructive conversations. We've had, you know, we've talked about the fact that there's three legs to our stool on real on reimbursement, being the cost of the drug and the margin associated with that, our clinical per diems, and then the nursing rate.

John C. Rademacher: It's done. I'll start and then Mike can add color. We always try to reinforce the value that we bring to the payers in helping to reduce the total cost of care. When they're looking at the alternatives as to where care could be delivered, we are on the right side of the cost-quality equation in that. And so, you know, we think that there are some constructive conversations.

Brian <unk>: Hey, Brian.

Brian <unk>: I'll start and then Mike can add color.

Brian Gil Tanquilut: We always are trying to.

Brian Gil Tanquilut: Reinforce the value that we bring to the payers in helping to reduce the total cost of care when they're looking at.

Brian Gil Tanquilut: Alternatives as to where care could be delivered we are on the right side of the cost quality equation in that and so we think that there are some constructive conversations we've had.

John C. Rademacher: We've talked about the fact that there are three legs to our stool on reimbursement, being the cost of the drug and the margin associated with that, our clinical per diems, and then the nursing rate. And we're always looking for a balance within that as to the contribution on that. We don't break it out.

Speaker Change: We've talked about the fact that there's three legs to our stool unreal on reimbursement being the cost of the drug and the margin associated with that are clinical per Dms and then the nursing right and we're always looking for getting balance.

John Rademacher: And we're always looking for getting balanced within that as to the contribution on that we don't break it out. We don't provide that level of detail, but there's always that focus for us as an organization. And I think in the conversations that we have with our payer partners through that, I think they have a recognition of that value and how we can help bend the trend of the total cost of care in that equation. But it's competitive and, you know, no one's calling us and asking to give us more money, as you would expect. And so, we're going to have to continue to fight for every basis point as we always have, and we're going to negotiate strongly.

Speaker Change #141: And that as to the contribution on that we don't break it out we don't provide that level of detail, but theres always that that focus for us as an organization and I think in the conversations that we have with with our payer partners through that I think they have a recognition of that value and how we can help bend the trend of the <unk>.

John C. Rademacher: We don't provide that level of detail, but there's always that focus for us as an organization. And I think in the conversations that we have with our payer partners through that, I think they have a recognition of that value and how we can help bend the trend of the total cost of care in that equation. But it's competitive, and no one's calling us and asking to give us more money, as you would expect.

Brian <unk>: Total cost of care in that equation, but it is competitive.

John C. Rademacher: And so we're going to have to continue to fight for every basis point as we always have, and we're going to negotiate strongly, but we like the breadth of our portfolio. We like the fact that we have both acute and chronic care within that our ability to serve consistently in all 50 states. All those things, Brian, are part of our comprehensive go-to-market strategy and the way that we position ourselves to preserve as much value and be paid fairly for the value that we deliver overall. Awesome, Thank you.

Speaker Change #104: No one's calling us and asking to give us more money as you would expect and so we're going to have to.

Speaker Change: You too.

Speaker Change: Fight for every basis point, as we always have and we're going to negotiate.

John Rademacher: But we like the breadth of our portfolio. We like the fact that we have both acute and chronic; within that, our ability to serve consistently in all 50 states. All those things, Brian, are part of our comprehensive go-to-market strategy and the way that we position ourselves to preserve its much value and be paid fairly for the value that we deliver to the overall ecosystem.

Speaker Change #107: Strongly but we like the breadth of our portfolio, we like the fact that we have.

Brian <unk>: Both acute and chronic within that our ability to serve consistently in all 50 states all of those things Brian are part of our comprehensive go to market strategy and the way that we position ourselves to preserve as much value.

Brian <unk>: And be paid fairly for the value that we deliver to the overall ecosystem.

Brian Tanquilut: Awesome. Thank you.

Brian Gil Tanquilut: Awesome. Thank you.

Brian Gil Tanquilut: Yeah. Thanks, Brian. Thanks, Brian.

Brian Gil Tanquilut: Okay. Thanks, Brian Thanks, Brian.

Operator: Thank you.

Speaker Change #103: Thank you.

Joanna Kajak: Our next question comes from the line of Joanna Kajak of Bank of America. Your line is now open.

Operator: Thank you. Our next question comes from the line of Joanna Gajuk of Bank of America. Your line is now open. Hey, good morning.

Speaker Change: Our next question comes from the line of.

Brian <unk>: Joanna.

Speaker Change #106: Bank of America. Your line is now open.

Joanna Kajak: Hi, good morning. Thanks for taking the question here.

Joanna Sylvia Gajuk: Thanks for taking the question here. So I guess, if I may, I'd follow up on a couple of things here. So first, on these new therapies, right? And clearly, you said, these are a headwind to gross margin percentages, but additive to the dollar, obviously. But is there, you know, any commentary from you that we can get in terms of the trajectory? So now, you know, you have maybe, you know, two quarters or three quarters, especially one of these therapies that you've been distributing? So kind of are you on track on these?

Joanna: Hey, good morning, Thanks for taking the question here, So I guess if I may.

Joanna Kajak: So I guess if I may follow up a couple of things here.

Joanna: Follow up couple of things here. So first on this new therapy Suede and clearly you said.

Joanna Kajak: So first on these new therapies, right? And Claudia said, "you know, these are the headwinds to gross margin percentages, but I did it to the dollar obviously." But is there, you know, any commentary from you that we can get in terms of the trajectory. So now, you know, you have maybe, you know, two quarters or three quarters. So, especially one of these therapies, you know, that you've been distributing.

Speaker Change #105: These are the headwinds to gross.

Brian <unk>: Margin percentages, but I did have two to the dollar obviously, but is there any any commentary from you guys, but we can head in terms of that.

Brian <unk>: <unk>.

Brian <unk>: <unk>.

Speaker Change #127: <unk>, a three quarter, especially one of these therapies.

Speaker Change: <unk> been distributing so kind of are you on track on this.

Michael Petusky: So, kind of, are you on track on these, you know, gross margin percentages you're proving, and when would you expect to kind of, you know, get those closer to kind of more normalized percent margin, gross margin. Yeah, Joanne, I think, look, it's a giant kind of articulated there; there isn't a roadmap. There isn't a standard tracker for, you know, how the margin, how the margin evolved. Again, the way we approach it. Naturally, as something has biosimilars that are introduced, the expectation, especially using some of the properties that John outlined in his prepared remarks, the expectation should be that those reference prices over time will decline.

Mike: You know, gross margin percentages are improving, and when would you expect to kind of, you know, get those closer to kind of a more normalized percent margin gross margin? Yeah, Joanna, I think. Look, as John kind of articulated, there isn't a road map, there isn't a standard tracker for, you know, how the margin evolves. Again, the way we approach it, naturally, as something has biosimilars that are introduced, the expectation, especially using some of the proxies that John outlined in his prepared remarks, should be that those reference prices will, over time, decline.

Speaker Change #100: Gross margin percentages in clothing, and when would you expect to kind of you know.

Speaker Change #100: Closer to.

Speaker Change: Kind of more normalized.

Speaker Change: Present margin question.

Speaker Change #112: Gross margin.

Joanne: Yes, Joanne I think.

Speaker Change: Is there any kind of articulated there isn't the roadmap there isn't.

Speaker Change: Our standard tracker for.

Speaker Change: The margin.

Speaker Change #114: How the margin evolves again, the way we approach it.

John C. Rademacher: Naturally as something has biosimilars that are introduced the expectation, especially using some of the proxy that John outlined in his prepared remarks, the expectation should be that those reference prices over time will decline at.

Michael Petusky: At what rate and over how many quarters is completely out of our control, because a lot of it has to do with pricing strategies by pharma, how competitive, how many biosimilars are introduced at what pace. From our perspective, what things going biosimilar from a procurement strategy is, is John articulated, it helps be risk our procurement strategies, because you're not beholden to one manufacturer, but you have a multi source procurement strategy that you can pursue.

Mike: At what rate and over how many quarters is... Lisa Gill, Michael Shapiro, John Rademacher, Michael Petusky, David MacDonald, Matthew. It helps de-risk our procurement strategies because you're not beholden to one manufacturer, but you have a multi-source procurement strategy that you can pursue. So, typically, over time, and again, if you're looking for a specific timeline, we unfortunately don't have one to provide, you see that revenue per patient event erode, but the percent of that lower revenue that we retain as gross margin is what we're looking for.

John C. Rademacher: At what rate and over how many quarters is completely out of our control because a lot of it has to do with pricing strategies by pharma how competitive how many biosimilars are introduced at what pace.

Speaker Change #102: From our perspective with things going Biosimilar from a procurement.

Speaker Change #102: Strategy as John articulated it.

John C. Rademacher: It helps derisk, our procurement strategies, because you're not beholden to one manufacturer, but you have a multi source procurement strategy that you can pursue so typically over time and again, if youre looking for a specific timeline. We unfortunately don't have one to provide you see that revenue per patient.

Michael Petusky: So typically, over time, and again, if you're looking for a specific timeline, we unfortunately don't have one to provide. You see that revenue per patient event, you wrote, but the percent of that lower revenue that we retain as gross margin, that typically expands from a rate perspective. Your question is going to be, well, where are the dollars shaking out? And we don't have an answer. Sometimes the dollars are lower, sometimes the dollars are higher, but I think it's important to underscore what John just talked about, which is what, regardless of what the ASPs for therapies do over time, we have a value proposition to providers and to payers, where we're providing that service wrap, which still drives deficiencies.

Mike: So, typically, over time, and again, if you're looking for a specific timeline, we unfortunately don't have one to provide, you see that revenue per patient event erode, but the percent of that lower revenue that we retain as gross margin is what we're looking for. Sometimes the dollars are lower, sometimes the dollars are higher, but I think it's important to emphasize what John just talked about, which is, look, regardless of what the ASPs for therapies do over time, we have a value proposition to providers and to payers where we're providing that service wrap, which still drives efficiency.

Speaker Change #117: Erode, but the percent of that lower revenue that we retain as gross margin that typically expands from a rate perspective. Your question is going to be well aware of the dollar is shaking out and we don't have an answer sometimes the dollars or lower sometimes $1 or higher but I think it's important to underscore what John just talked about.

John C. Rademacher: But regardless of what the Asps for therapies.

Speaker Change #108: Do over time, we have a value proposition to two providers and payers, where we're providing that service rep, which still drives efficiencies. So having said that if a if a drug is being.

Michael Petusky: So having said that, if a drug is being, you know, administered in an HOPD and acute care setting, we can articulate that the net cost to the payer is considerably lower in a setting where the patients want to receive it. And so, that gives us confidence that even as our portfolio, which frankly today, the majority of our dollars of revenue are either comprised of biosimilar or generic drugs today. We'll continue to be able to generate decent margins because of that value proposition.

Mike: So, having said that, if a drug is being administered in an HOPD or in an acute care setting, we can articulate that the net cost to the providers and to payers is going to be higher, because the payer is considerably lower in a setting where the patients want to receive it.

Speaker Change #108: Administered <unk> in an acute care setting we can articulate that.

Speaker Change #102: Net cost to the the <unk>.

Speaker Change #102: Mayor is considerably lower in.

Speaker Change #102: In a setting where the patients want to receive it and so.

Mike: That gives us confidence that even as our portfolio, which, frankly, today, the majority of our dollars of revenue are either comprised of biosimilars or generic drugs today, will continue to be able to generate decent margins because of that value property. But I don't think I was actually asking the opposite, as in the new therapies like Vijuvik that, you know, you've been ramping up. And, you know, the prior discussion was around how they initially compressed the gross margin percentages. But I guess with time, the margins improved.

Speaker Change #102: That gives us confidence that even as our portfolio, which frankly today the majority of our dollars of revenue.

Speaker Change #102: Are either comprised a biosimilar or generic drugs today will.

Speaker Change #102: We will continue to be able to generate decent margins because of that value proposition.

Joanna Kajak: But I don't think I was asking the opposite. I wasn't the new therapies like the Juvec that, you know, you've been rumping up. And, you know, the prior discussion was around how initially they compress the gross margins percentages, but I guess with time, the margins improve. So I was actually asking, like, you know, where you are in this trajectory of some of these therapies without, you know, calling on specifics.

Speaker Change: Brian I think actually I was asking the opposite as it is that the new therapies that can achieve that.

Speaker Change #115: <unk> been ramping up and the pie discussion was around how initially that compressed the gross margin percentages, but I guess with time the margins improve stylus actually asking like where you are in the trajectory of some of these packages without calling out specifics and then should we expect this.

Mike: So I was actually asking, like, where you are in the trajectory of some of these therapies without, you know, calling out specifics. And then, you know, should we expect this year to kind of make some contribution as revenues and the gross margin percentage improve on these new therapies? Or is it more like twenty, twenty five?

Michael Petusky: And, and then, you know, should we expect, you know, this year to kind of, you know, have some contribution as these revenues and the gross margin, you know, percentage improve on these new therapies, or is it more like 2025? Yeah, my mistake. Appreciate the clarity.

Speaker Change #110: This year to kind of.

Speaker Change #118: I have some contribution as these revenues and gross margin.

Speaker Change #111: Percentage gene pool on these new therapies or is it more like 2025 event.

Mike: Yeah, my mistake. Appreciate the clarity, Joanna. Look, we have a very proven track record of commercializing new rare orphan and LDD therapies. Again, these are typically very high cost per patient event because you have very costly, new-to-world therapies. The margin rate is typically single digits. And, you know, the dollars are still attractive.

Speaker Change #111: Yes, my mistake I appreciate the clarity Joanna look.

Michael Petusky: Joanna, look, we have a very proven track record of commercializing new rare orphan and LDD therapies. Again, these are typically very high cost per patient event because you have very costly new-to-world therapies. The margin rate is typically single digits. We want to make sure that we're covering, and out of the gate, they're typically lower because you know we're building that patient cohort and that clinical service model. And over time, and this is years, not quarters. You know, you can gradually improve those margins as you build a patient cohort. You can re-engage with the manufacturer around advanced services and capabilities and things we can bring to the table clinically.

Speaker Change #113: We have a very proven track record of commercializing New railroad orphan Ldds therapies again. These are typically very high cost per patient event, because you have very costly new to world therapies. The margin rate is typically single digits and.

Mike: We don't launch therapies at a loss. We have internal hurdles that we want to make sure that we're covering. And out of the gate, they're typically lower because we're building that patient cohort and that clinical service model. And over time, and this is years, not quarters, you can gradually improve those margins.

Speaker Change #113: The dollars are still attractive we don't launched therapies at a loss.

Speaker Change #113: Have internal hurdles that we want to make sure that we're covering.

Speaker Change #111: And out of the gate, they're typically lower because we're building that patient cohort in that clinical service model and over time and this is years not quarters.

Mike: As you build a patient cohort, you can re-engage with the manufacturer around advanced services and capabilities and things we can bring to the table clinically. And so you can, you know, typically drive those margin rates up into the high single digits and go back to patient one that may still be unserved because these are typically lifelong chronic conditions. That's a way that we can create value over time. The launch of the more recent ones, I'd say, is on track or ahead of track from a revenue perspective. And again, I think that's definitely going to be part of the story going forward. Right, exactly.

Speaker Change #111: You can gradually improve those margins as you build a patient cohort you can reengage with the manufacturer around advanced services and capabilities and things, we can bring to the table clinically and so you can.

Michael Petusky: And so you can typically drive those margin rates up into the high single digits, and going back to patient one that may still be on service because these are typically lifelong chronic conditions. That's a way that we can we can we can create value over time.

Speaker Change #111: Typically drive those margin rates.

Speaker Change #111: Up into the high single digits and going back to the patient one.

Speaker Change #111: It may still be on service because these are typically lifelong chronic conditions.

Speaker Change #111: That's the way that we can.

Speaker Change: We can.

Michael Petusky: I would just say the launch of the more recent ones. I'd say are on track or ahead of track from a revenue basis perspective. And again, I think that's going to be definitely part of the story going forward. Right.

Speaker Change: Can create value over time, and I would just say the.

Speaker Change: The launch of the more recent ones I would say are on track or ahead of track from a revenue basis perspective, and again I think thats going to be definitely part of the story going forward.

Joanna Sylvia Gajuk: And if I may, another follow-up. So, we're talking about subcutaneous formulations, and you mentioned it all depends, I guess, on the channel and, I guess, the referral sources, their preference. And, you know, if something works for a patient, that does not necessarily mean that they're going to try a different formulation. But, I guess, the new Antivio subcutaneous has been launched.

Joanna Kajak: Exactly. Thank you.

Joanna Kajak: And if I may, another follow-up. So we're talking about subcutaneous formulations, and you mentioned, you know, it all depends on the channel and the referral sources, their preference, and you know if something works for a patient and not necessarily means that they're going to try a different formulation, but I guess the new interview subcutaneous launched. So any kind of, I guess, earlier we saw how this, you know, is impacting your existing patient base is at all and kind of what your expectation is for penetration for this particular one. And then I guess in particular, the quote, what response I guess in the market you're seeing from, you know, either in the insurers or prescribers or, you know, even pharmaceutical companies? Are there actively, you know, trying to to move that drug from the infusion to the subcutaneous.

Speaker Change #124: Great. Thank you. Thank you and if I may I know the follow up since we're talking about subcutaneous formulations and you mentioned.

Speaker Change: All of it.

Speaker Change #133: Depends I guess on the channel and I guess, the referral sources that preference.

Speaker Change #123: Something works for a patient and that necessarily means that they are going to shy at different formulations, but I guess, then you MTV subcutaneous launched so any kind of I guess early Lisa how this.

John C. Rademacher: So, any kind of, I guess, early read on how this is impacting your existing patient base, if at all, and kind of what your expectation is for penetration for this particular one? And then, I guess, in particular, the quote, what response, I guess, in the market you're seeing from, you know, either insurers or prescribers or, you know, even pharmaceutical companies? Are they actively trying to kind of move that drug from the infusion to the subcutaneous? Yeah, Joanna, it's John.

Speaker Change #120: Is impacting your existing patient base is that all and kind of what your expectation is for penetration.

Speaker Change #121: Despite the Q1.

Speaker Change #119: And then I guess, you can particularly at <unk>.

Speaker Change: What are some thoughts I guess in the market are you seeing from.

Speaker Change: Insurance.

Speaker Change #156: Prescribers or even pharmaceutical companies are they actively.

Speaker Change #125: I'm trying to kind.

Speaker Change #125: Kind of move that track from the infusion to the subcutaneous.

John Rademacher: Yeah, Joanne, it's time. I'll, I'll, I'll respond to that. So, you know, at this point in time, we haven't seen a significant shift in our patient census moving towards the subcutaneous. There are, as we're trying to call out, I mean, there's just, there's a lot of dimensions in that. In some instances, the subcutaneous formulation is more expensive. So therefore, the payers aren't necessarily looking to move patients onto that service or onto that product, given that it's a higher price on that. So, you know, those types of things kind of factor in. At this point in time, our census and our patient basis remains pretty stable.

John C. Rademacher: I'll respond to that. So, you know, at this point in time, we haven't seen a significant shift in our patient census moving towards the subcutaneous. There are, as we've been trying to call out, I mean, there's just, there's a lot of dimensions to that. In some instances, the subcutaneous formulation is more expensive.

Speaker Change #125: Yeah, Julian it's kind of I'll I'll respond to that so.

Julian: At this point in time, we haven't seen a significant shift in our patient census of moving towards the subcutaneous.

Julian: There are.

Speaker Change #122: We're trying to call out I mean, there's just there's a lot of dimensions in that in some instances to subcutaneous formulation is more expensive. So therefore be payers aren't necessarily looking to move patients onto that service are onto that product given that it's a higher price on that so.

John C. Rademacher: So, therefore, payers aren't necessarily looking to move patients onto that service or onto that product, given that it's a higher price for that. So, those types of things kind of factor in. At this point in time, our census and our patient basis remains pretty stable. We haven't seen a significant shift of moving from the IV to the subcutaneous.

Speaker Change #122: These types of things kind of factor in.

Speaker Change #122: At this point in time, our census in our patient base has remained pretty stable, we haven't seen a significant shift of moving from the IV to subcutaneous.

John Rademacher: We haven't seen a significant shift of moving from the IV to the subcutaneous. In many instances, though we will retain that patient on the subcute, given that it's part of our formulary for many of these products. So, you know, early to tell on some of the, on some of that, we're always looking to understand what are the migration, you know, trends that we may see on it. But at this point in time, the patient census and the prescribing patterns have remained consistent with our expectations and consistent with the IV therapy as being, you know, still front and center within the way that they're prescribing the dose.

Speaker Change #122: In many instances, though we will retain that patient on the sub Q.

Speaker Change #122: Given that it's part of our formulary for many of these products. So.

Speaker Change #122: Early to tell on some of the.

Speaker Change #122: And some of that we're always looking to understand what are the migration.

Speaker Change #122: The trends that we may see on it but at this point in time.

John C. Rademacher: In many instances, though, we will retain that patient on the subcu, given that it's part of our formulary for many of these products. So, early to tell on some of that, but we're always looking to understand what the migration trends that we may see on it are. But at this point in time, the patient census and the prescribing patterns have remained consistent with our expectations and consistent with IV therapy as being still front and center within the way that they're prescribing the dose. You were there, Joanna. Obviously, the subcutaneous evolution is a great development for certain patients, but frankly, we have not seen where a subcutaneous administration introduction becomes the standard of care quickly. Consider the example of immune globulin.

Julian: The patient census, and the App.

Speaker Change: The prescribing patterns have remained consistent with our expectations and consistent with.

Speaker Change: With the IV therapy is being.

Speaker Change: It's still front and center within the way that they are they are prescribing the doses.

John Rademacher: Thank you. You would add, Ed. Go ahead, Ed. Well, obviously, some of you at Evolution is a great development for certain patients. But frankly, we have not seen where a subcutaneous administration introduction becomes the standard of care quickly. Use the example of immune globulins. Sub-QIG has been around for more than a decade, yet 75 percent of all IG patients still receive their therapies intravenously because it's more efficient. It's better for higher doses. And frankly, some patients prefer it, or given clinical circumstances, it still requires and suggests health care professional oversight. So obviously, we get a lot of questions on. Again, for some patients, it's a great development.

Ed: Hey, Ed Joanna as well, obviously Q evolution is a great development for certain patients but.

Speaker Change: Frankly, we have not seen where a subcutaneous administration introduction becomes the standard of care quickly use. The example of immune globulin.

Mike: Sub-Q IG has been around for more than a decade, yet 75% of all IG patients still receive their therapies intravenously because it's more efficient, it's better for higher doses, and frankly, some patients prefer it. Or, given clinical circumstances, it still requires and suggests healthcare professional oversight. So obviously, we get a lot of questions on this.

Speaker Change #129: <unk> has been around for more than a decade, yet 75% of all <unk> patients still receive their therapies intravenously, because it's more efficient it's better for higher doses and frankly, some patients prefer it or given clinical circumstances. It still requires.

Speaker Change #129: Suggest health care professional oversight. So obviously, we get a lot of questions on <unk>.

Mike: Again, for some patients, it's a great development, but we have not seen where the Sub-Q version becomes the standard of care over an abbreviated short time frame. And if I may just follow up on the comment around that, you know, in many instances, the patient stays with you because of the former. So that should happen.

Speaker Change: Again for some patients it is a great development, but we.

John Rademacher: But we have not seen where the sub-Q version becomes the standard of care over an abbreviated short timeframe.

Speaker Change: We have not seen where the sub Q version becomes the standard of care over an abbreviated short timeframe.

John Rademacher: And if I may just follow up on the comment around that, you know, in many instances, the patient stays with you because of the firmware. So if that was to happen, what kind of impact that is to you for, you know, on the gross margin, I guess, dollars and percentages. So I guess, you know, you're still going to fill for that and collect for the cost of the drug. But maybe there's no nursing component, but still maybe there's per DM. So help us understand, like, you know, what happens if that would be happening in terms of these patients still staying with you, but instead, you know, switching to the sub-Q versus infusion.

Speaker Change: And if I may just follow up.

Speaker Change: On the comment around that.

Speaker Change #154: In many instances that the patient stays with you because of the formulary. So.

Speaker Change #126: That was to happen.

Joanna Sylvia Gajuk: What kind of impact that is on you for, you know, on the gross margin, I guess, dollars and percentages. So I guess, you know, you're still going to bill for that and collect for the cost of the drug. But maybe there's no nursing component, but still, maybe there's per diem. So help us understand, like, you know, what happens if that were if that was happening in terms of these patients still staying with you but instead, you know, switching to the subcube versus infusion. Yeah, it really depends on the therapy and the payer situation.

Speaker Change #126: What kind of impact that his team on the <unk>.

Speaker Change #126: Most margin.

Speaker Change #126: Percentages, so I guess.

Speaker Change #126: Are you still going to bill for that collect what that cost of the drug but it may be theres no missing component, that's still maybe theres per DM. So help us understand like what happens if that if that was to.

Speaker Change #126: Would be happening in terms of these patients still staying with you but.

Speaker Change #126: Switching to <unk>.

Speaker Change #135: Q versus infusion.

John Rademacher: Yeah, it really depends on the therapy in the payer situation. I think, Joanne, as you know, as we've always tried to outline for folks, typically, when we provide infusion therapy, we bill for the drug, we bill for the nursing if the nursing is present, and we bill for a clinical podium, which is a charge per day of therapy to cover all the pharmacy infrastructure and other care model assets that we bring to the table. Naturally, the economics for subcutaneous therapy is different. It's a higher reference price in most instances to Joanne's point. There's obviously a spread we're making on that.

Mike: I think, Joanna, as you know, as we've always tried to outline for folks, typically, when we provide infusion therapy, we bill for the drug, we bill for the nursing if a nurse is present, and we bill for a clinical per diem, which is a charge per day of therapy to cover all the pharmacy infrastructure and other care model assets that we bring to the table. Naturally, the economics for subcutaneous therapy are different. It's a higher reference price, in most instances, to John's point.

Speaker Change #136: Yeah, it really depends on that there.

Speaker Change #126: Therapy in the payer situation I think Joanne as you know as we've always tried to outline for folks typically when we provided infusion therapy rebuild for the drug we built for the nursing if a nursing is present and we built for our clinical per diem, which is a.

Speaker Change #126: It's a charge per day of therapy to cover all of the pharmacy infrastructure and other <unk>.

Speaker Change #126: Care model assets that we bring to the table naturally the economics for a subcutaneous therapy is different it's a higher reference price in most instances to John's point there.

Mike: There's obviously a profit we're making on that. There's not a nurse present in most cases, so it changes. It's a different revenue event, but it also preserves that nursing capacity for other infused patients. So it's just different.

John C. Rademacher: Theres, obviously, a spread we're making on that there is not a nurse present in most cases so.

John Rademacher: There's not a nurse present in most cases. So it changes; it's a different revenue event, but also that preserves that nursing capacity for other infused patients. So it's just different. You know, we underwrite it accordingly as we approach, so that's about all the color we can provide on that perspective.

John C. Rademacher: It changes its a different revenue event, but also that preserves that nursing capacity for other infused patients. So it's just different.

Speaker Change: We.

Speaker Change: We underwrite accordingly, as we approach payers so.

Speaker Change: Okay.

Speaker Change #138: About all of the color, we can provide on that perspective.

Joanna Kajak: Great. Thank you.

Mike: That's about all the color we can provide on that. Great, thank you. If I may, on the last follow-up, sorry, on the discussion around the new suites, can you give us a sense of how many you added this quarter and the kind of plans for this for this year? Thank you. Yeah, we've added three this quarter.

John Rademacher: If I may, on the last follow-up, sir, on the discussion around that new suites, can you give us a sense of how many did you add this quarter and a kind of plus for this year? Thank you. Yeah, we've added three in the quarter, so I think we're up to around seven new sites in the quarter. And again, we feel very good about the 700 chairs that we have coast to coast. Great.

Speaker Change #137: Great. Thank you if I may.

Speaker Change #140: The last follow up sorry on that discussion around that new suites can.

Speaker Change #158: Can you give us a sense of how.

Speaker Change #160: How many did you add this quarter and it kind of planned for this year. Thank you.

Mike: So I think we're up to around seven new sites in the quarter. And again, we feel very good about, you know, the 700 chairs that we have coast to coast. Great, thanks.

Speaker Change #132: Yes, we've added three in the quarter. So I think we're up to around seven new sites in the quarter and again, we feel very good about the.

Speaker Change #132: 700 chairs that we have coast to coast.

John Rademacher: Thanks. Thanks, Joanna.

Speaker Change #144: Great. Thanks.

Joanna Sylvia Gajuk: Thanks, Joanna. Thank you. Our next question comes from the line of Michael Petusky of Barrington Research. Your line is now open, and it has the cadence of the cat. About, as you expected, it better works.

Joanna: Thanks Joanna.

Operator: Thank you.

Michael Patuski: Our next question comes from the line of Michael Patuski of Barrington Research. Your line is now open.

Speaker Change #155: Thank you. Our next question comes from the line of Michael Pitofsky of Barrington Research. Your line is now open.

Michael Patuski: Good morning. Mike, I understand you reaffirmed the cash. Well, got it.

Speaker Change: Morning.

Speaker Change #134: Understanding that you.

Michael Patuski: I'm just curious. It has the cadence of the cash. Floor recovery, related to change. Is that come in about as you expected? Is better worse? I mean, can you just sort of characterize sort of the cadence of what you've seen so far, obviously being 90 or so days smarter than you were when you last talked about it?

Michael H. Shapiro: Reaffirm the cash flow guidance I'm, just curious has the cadence of the cash flow recovery related to changes that come in about as you expected better worse I mean can you just.

Speaker Change #151: Would you characterize sort of the cadence of what you've seen so far obviously being 90 or so days smarter than you were when you last talked about it.

Michael Patuski: Yeah, Mike. Look, I mean, relative to where I'm feeling a whole lot better than I was 90 days ago. I think candidly and hats off to the rough cycle team.

Michael John Petusky: Yeah, Mike, look, I mean, relative to where I'm feeling a whole lot better than I was 90 days ago. I think candidly, and hats off to the RevCycle team, I think the pace of recovery and the collaboration with payers to be responsive given the circumstances is probably a bit ahead of where we expect it to be and just really, really pleased with where we exited the quarter from a cap structure.

Speaker Change #153: Yeah, Mike look I mean relative to where I am feeling a whole lot better than I was 90 days ago.

Speaker Change: Candidly.

Speaker Change: And hats off to the Rev cycle team I think the pace of recovery in the collaboration with payers to be responsive given the circumstances I think.

Michael Patuski: I think the pace of recovery and the collaboration with payers to be responsive given the circumstances, I think, you know, it's probably a bit ahead of where we expected to be. And just really, really pleased with where we exited the quarter from a cap structure perspective.

Speaker Change: It's probably a bit ahead of where we expect it to be and just really really pleased with where we exited the quarter from a cap structure perspective.

Michael Patuski: And then I'm the nursing.

Michael John Petusky: I want to make sure you said seven for the quarter, and then I'm sorry you said three for the quarter, and then you said seven was it. 1 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28, You got it.

Speaker Change: And then on the.

Michael Patuski: I want to make sure you said seven for the quarter. And then I'm sorry, you said three for the quarter, and then you said seven was seven for the first half. Is that what the seven was? You got it. Okay.

Speaker Change #161: On the nursing side I wanted to make sure you said, 7% for the quarter.

Speaker Change #143: I'm sorry, you said three for the quarter and then you said seven seven for the first half is that with the seven one.

Mike: Okay. And, uh, in terms of just, uh, success if you look out three to five years, I mean, can that move to 40%?

Michael Petusky: And in terms of just as you think about that, I guess initiative longer term, I mean, does 32% I mean, but what success, if you look out three to five years, I mean, can that move to 40%? Can you talk about what success would look like three to five years out on that that piece? Yeah, I think not to give you a non-answer. I think success looks like, you know, considerably more than 32%. You know, when we first initiated this, the question was, could this be 30% of all nursing events. And I think we've answered that, obviously.

Speaker Change #130: Got it okay.

Speaker Change #150: In terms of just as.

Speaker Change #130: As you think about that.

Speaker Change #142: I guess initiative longer term I mean, the 32% I mean, what success. If you look out three to five years I mean can that moved to 40% can you can you just talk about what success would look like three to five years out on that.

Mike: Can you just talk about... Yeah, I think not to give you a no answer, but I think success looks like, you know, considerably more than 32%. You know, when we first initiated this, the question was, could this be 30% of all nursing events? And I think we've answered that, obviously.

Speaker Change #130: Yes.

Mike: Look, the way we think about it is we're going to continue to invest in and add to our network of infusion suites. The great thing is we have tremendous capacity in the chairs that we've expanded, so we can accommodate significantly more patient events in our existing footprint. So, as we said entering the year, don't equate a slowing pace of opening these centers with a lack of confidence in the strategy.

Speaker Change #128: Yes, I think.

Speaker Change #162: To give you a non answer I think success looks like considerably more than 32%. When we first initiated the question was could this be 30% of all nursing events and I think we've answered that obviously.

Michael Petusky: Look, the way we think about it is we're going to continue to invest in add to our network of infusion suite. The great thing is we have tremendous capacity and the chairs that we've expanded. So we can accommodate significantly more patient events in our existing footprint. So, as we said, entering the year, don't equate a slowing pace of opening these with a lack of confidence and the strategy. We just added a considerable amount of capacity, which is already generating significant value for the enterprise, and we think there's a long runway. So I think, you know, success down the road is considerably higher utilization than where we are today, but the great thing is, you know, it doesn't have to be 40 to 50% to drop considerable economic value to the enterprise.

Speaker Change #139: Look the way we think about it is we're going to continue to invest in AD.

Speaker Change #139: Through our network of of infusion suites.

Speaker Change #139: The great thing is we have tremendous capacity in the chairs that we've expanded so we can accommodate significantly more.

Speaker Change #139: Patient events in our existing footprint. So as we said entering the year don't equate a.

Speaker Change #139: Slowing pace of opening these with a lack of confidence in the strategy. We just added a considerable amount of capacity which is already.

Mike: We just added a considerable amount of capacity, which is already generating significant value for the enterprise, and we think there's a long runway. So, I think success down the road will be considerably higher utilization than where we are today, but the great thing is it doesn't have to be 40 to 50 percent to add considerable economic value to the enterprise. Did acute therapy revenue grow year-over-year in the quarter or not?

Speaker Change #139: Generating significant Val.

Speaker Change #139: Value for the enterprise and we think there's a long runway. So I think success down the road is considerably.

Speaker Change #139: Utilization than where we are today, but the great thing is it doesn't have to be $40 to 50% drop considerable economic value to the enterprise.

Michael Petusky: Great.

Michael Patuski: Just, I want to try to dial this in slightly.

Speaker Change #146: Okay great.

Speaker Change #147: Just I wanted to kind of dial it slightly.

Michael Patuski: You sort of commented earlier around chronic acute, but I'm just curious. Did acute therapy revenue grow year over year in the quarter, or? Yes. It did. Okay. Thank you.

Speaker Change #149: Commented earlier around chronic and acute but I'm just curious did acute therapy revenue grow year over year in the quarter or yes.

Speaker Change #128: Yes.

Speaker Change #157: Okay terrific. Thank you.

Mike: Yeah. Thanks Mike. Thanks Mike. All right, thank you.

Mike: Thanks, Mike Thanks, Mike.

Operator: All right. Thank you.

John Rademacher: I am showing no further questions at this time.

Mike: Alright, thank you.

John C. Rademacher: I have no further questions at this time. I would now like to turn it back to management for closing remarks. Yeah, thank you all for joining us this morning and participating in our call. As we outlined, the second quarter was very productive, and our team continued to execute at a very high level, even with significant disruptions in the marketplace.

Operator: We understand the important role that we play in delivering care to our patients and their families, and this remains the light that guides us as we continue to serve more patients in 2024. Thank you, everyone, for your attendance. Take care and have a great day. Thank you for your participation in today's conference. This does conclude the program. You may now disconnect. Thank you for watching!

Speaker Change #145: Showing no further questions at this time I would now like to turn it back to management for closing remarks.

John Rademacher: I would now like to turn it back to management for closing remarks. Yeah. Thank you all for joining us this morning and participating in our call. As we outlined, the second quarter was very productive, and our team continued to access you to the very high level, even with significant disruptions in the marketplace. We understand the important role that we play in delivering care to our patients and their families, and this remains the light that guides us as we continue to serve more patients in 2024.

Speaker Change #152: Yes. Thank you all for joining us this morning and participating.

Speaker Change #152: Paul as we outlined the second quarter was very productive and our team continued to execute at a very high level, even with significant disruptions in the marketplace. We understand the important role that we play in delivering care to our patients and their families and this remains the light that guides us as we continue to serve more patients in 2024.

John Rademacher: Thank you, everyone, for your attendance. Take care and have a great day.

Speaker Change #148: Thank you everyone for your attendance take care and have a great day.

Operator: Thank you for your participation in today's conference. This does conclude the program.

Speaker Change #163: Thank you for your participation in today's conference. This does conclude the program you may now disconnect.

Operator: You may now disconnect.

Speaker Change #148: Yeah.

Speaker Change #145: [music].

Speaker Change #145: Yes.

Speaker Change #145: Yes.

Speaker Change #145: Okay.

Speaker Change #128: Okay.

Speaker Change #128: Okay.

Speaker Change #128: Yes.

Speaker Change #128: Sure.